Financial Peace

I just finished reading Dave Ramsey's book Financial Peace for the 2nd time. I first read it the year after I graduated college but didn't apply much of it then. I think I was inspired to read it again now because we recently took out a fairly large personal loan to make improvements to the house/yard. The main thing I remembered from the book was the "Debt Snowball" plan for getting rid of debt quickly. I knew we needed to apply that now or else we will be paying on our school loans until I am 57 years old. Ouch!

You pretty much have to get mad about your debt in order to have the motivation to eliminate it. It's best if you come up with ways of finding a little extra money (garage sale, part-time job, eat out less, etc) to put towards paying off that debt. First, you list out all your debts in order from least to greatest balance (include the type, balance, monthly payment and interest rate). Then you put all the money you can towards the lowest balance until it's paid off, while still paying the minimum payment on your other debts (to avoid penalties). Once that 1st balance is gone, you attack the 2nd debt, paying the normal amount PLUS the amount you used to normally pay on the 1st debt. You are therefore paying extra on the 2nd debt and it will disappear quickly. Once the 2nd debt is gone, you attack the 3rd, paying it's normal payment plus the amounts you used to pay on the 1st two. So, your monthly overall debt payment total (for all debts combined) is the same, but it is allocated differently that before. Get it? Eventually you will have paid off everything ahead of schedule so you will save on interest and be finally freeeee!

One example he gives is that a $100,000 30-year mortgage at 10% will be paid off in 21.1 years just by paying one extra payment per year. That's almost 9 years early just for ONE extra payment per YEAR. Wow! And think of all that interest you'd save!

One reason you start with the smallest debts even if their interest rate is lower is because you will see progress sooner and will be encouraged to keep going. He stresses that once you get rid of you debts you can easily save up for future purchases and not ever take on debt again. You don't want to fall and live in that hole again once you've tasted freedom!

Dave goes over so many important financial things in this book! He stresses the need to save money. He says first you need to pay minimum on everything until you get $1,000 in savings. Then kill all your debt (as described above), except your home. Then save up 3-6 months of living expenses into an account that can be accessed easily (a savings account, not an IRA, for example). This is your emergency fund and needs to remain untouched unless there is an emergency (medical, for example). He says that Money magazine stated that "75% of families will have a major negative financial event in any 10-year period". This causes a lot of bankruptcies because most people are just not prepared for that possibility (they have little to no savings).

After you have your emergency savings, you should save for retirement by investing in various places, especially all pretax retirement savings plans (401k, deductible IRA, etc) you possibly can. He explains all the options and also strongly recommends mutual funds (there is a whole chapter explaining those).

Once you are saving regularly for retirement, put all the extra money you can towards finishing off your home mortgage. Get that loan paid off early!

At the back of the book he provides many financial worksheets that help you get started, get organized and stay on track with your financial goals. You really should read this book and take notes!

Here are some other things he said that stood out to me:

"The personal, philosophical and emotional problems and strengths that you have will be reflected in your use of money. It you are very disciplined, you can be a good saver of money. If you are very selfish or self-centered, you will surround yourself with expensive toys that you cannot afford."

"No farmer has ever grown a crop unless he planted some seed. Personal growth requires that you give money away.... Somehow giving reminds us that the world does not revolve around us and that no matter what our financial status is, someone always is in a much worse situation. Good things that cannot be calculated or quantified are set in motion in your life and in your finances when you give."

"If you have too many open credit card accounts, even with zero balances, the mortgage company will count it against you when qualifying for a mortgage."

"The most effective way to save is by applying discipline over a period of time, as opposed to trying to save in big splashes. There are at least 3 main reasons to save money. First, you should save until you have built an emergency fund. Second, you should save for purchases to avoid debt. Third, you should save for wealth building."

"To the husbands: The emergency fund is an investment in your marriage! Women feel more secure with that 3-6 months of expenses in the bank!"

"You should never invest in anything you do not understand thoroughly.... If you cannot explain it to someone else, you should not buy or invest in it."

"Mutual funds are never short-term investments. If you cannot leave money alone at least 5 years, then you should not invest. Ibbotson's yearbook, a reference on most mutual fund brokers' desks, advises that if you had invested on the short term, just one year, in small company stocks you would have lost money 29 of the last 69 years. However, by leaving your investment alone in any possible 10-year period in the last 69 years, you would have made money 97% of the time and would have averaged over 12% per year."

"Never invest in something if the risk robs you or your spouse's peace."

"You have to avoid getting buying fever. When you get the fever, you lose all patience and negotiating power."

"Money--how it is handled and how it is managed--plays an intense role in the dynamic of the family."

"Most men draw much of their self-esteem or ego satisfaction from a sense of accomplishment in their chosen career, and in America we seem to keep score on the success of the career by dollar amounts. So money, the lack of it or the poor management of it can have an empowering or devastating effect on the husband."

"Women derive something different from the way money is managed in the household. They draw security and peace from the proper handling of household finances. If the money is managed poorly and there is constant stress, the wife will tend to feel insecure."

"I think we should learn financial principles and then pass them on to our children as if our life depended on it. Teach the children and start young."

"The man, woman or couple who makes significant financial decisions without careful consideration of outside counsel first is destined for pain and heartache."

"God gave women a sixth sense called women's intuition, which He did not give us. Most women have the ability to come to the right decision even if they totally misunderstood or have not a clue about the data. I am a very logical person so I fought this for years--and I can't tell you how much money it cost me and how much I've saved since taking my wife's advice. Women often get the right answer by "feeling" it."

"It takes an emotionally secure person to seek and seriously consider the counsel of parents."

"Everyone needs a written budget.... Something mystical happens when we commit something personal to writing. We somehow begin to live out our plans.... A good plan lives and moves--is dynamic--and changes as your life changes."

"If you want to control your estate and be responsible to your family, you need to have a current will."

"Successful people know the value of discipline in their lives."

1 Fresh Stir Fry

We had dinner tonight at this local place called 1 Fresh Stir Fry. It's in between a fast food and a sit-down restaurant (you order at the counter but they bring you your food and take away your bowls and trash when you are finished). You mark your order with a dry-erase marker on a laminated card, choosing your starch (various rices and pastas), meat, veggies, sauce (7 choices ranging from sweet to spicy) and topping (various nuts, herbs, crumbled cheeses, etc) and then they ring you up at the register. The location closest to our house is always really clean and quiet (there is one other location in town).

I usually get my stir-fry in a bowl, but tonight I opted for the wrap version (for the 1st time). I was not disappointed! They even served Ruffles potato chips with the wrap (I was unaware that they would that).

With every order they give you a large malt ball for dessert. After eating your delicious stir-fry meal (they also have sushi & salads), a large chocolate malt ball is the perfect finish. Tonight it seemed especially delicious. I put the whole thing in my mouth and slowly chewed it as it melted. It seemed larger than it actually was, filling my whole mouth with luscious chocolatey goodness. I was in heaven!

Shopping while pregnant

I went to Governor's Square Mall yesterday to get my free $20 Discover gift card. The process was simple (show them my receipts totaling at least $200 and sign my name on a list indicating that I received a gift card) and I didn't have to wait in line. Yeah! Of course I browsed the mall next. Actually, I started by eating a chocolate chip cookie with frosting on it from the Great American Cookie Co. I love treating myself to that when shopping at the mall and I hadn't had one in a looooong time.

It's different shopping now that I'm pregnant (aside from the fact that I go to the bathroom about every hour). Most of the stores at the mall are clothing stores, but I can't wear normal clothes anymore so I have to skip a lot of stores while browsing. I did manage to find the tiny maternity section at JC Penney and ended up buying 3 necessary items (that were on sale!)--another pair of jeans (this pair has the panel that sits under the belly, my other pair has the panel that goes over the belly), a black long-sleeved shirt and a grey long-sleeved shirt.

The maternity/plus size dressing room was closed and locked so I had to find another one and it was clear across the store. I was a bit perturbed about that...of all the dressing rooms that should stay open, that is the one because it is more of a burden for the heavier ladies to walk far! I had to try a medium and large size of everything because I'm not sure which one would fit better so I had a heavy stack of clothes. Oy!

I also bought 2 Christmas candle holders and 2 oil warmers with some birthday money. The designs on the candle holders are more visible when the tealights are lit inside because then the shapes glow through. I love snowflakes and elephants so I was very happy to find these! The elephant oil warmer is the cutest ever!





Once it was dark outside I realized that the mall looks really neat inside in the evenings. The lighting is minimal so it was mostly dark overhead (way up in the rafters) with the glow from the stores all around. There were only a few small bulbs for the overhead lighting and the rest of the lighting was comprised of small bulbs arranged in 3 rows around a mirrored section high up on the supporting poles. Very nifty!

I found out that at this mall you can take your pet to get a picture on Santa's lap. How funny is that? They say since your pet is part of the family, why not? I'd like to see how that goes down. I know Minga wouldn't sit still! She'd probably pull Santa's beard off!

Thoughts on Tallahassee

Tallahassee is a nice town. There are trees EVERYWHERE and lots of canopy roads (trees on both sides of the road that branch over the road and intertwine above in a canopy-like fashion). The numerous trees sometimes make it hard to find a store or restaurant because they line the roads and block your view of parking lots and buildings. At least it's prettier that way though.

There are also bike lanes on just about every road (impressive). I have yet to see a cyclist in that lane though. I think it would be a bit scary to ride there, but I guess it's better than riding on the edge of a regular lane like in most cities. Many times just before an intersection, the tiny bike lane will be in between the regular lane and one of those curving right turn lanes where you just have to yield and not stop at the light. It would be nervewracking to be a biker sandwiched between two cars there!

Tallahassee is a town of U-turns. There are lots of divided highway type roads (gotta have those trees lining the median!) which means you usually have to turn right out of parking lots. I've already done more U-turns in the 3+ months I've lived here than I did in my 12 driving years in Tulsa! Wheee!

There are several movie theaters in Tallahassee and even a $1 theater (which I'm told is rare...though Tulsa had at least 2 of them). The screens aren't as large as the newer theaters in Tulsa, but the cool thing is they charge matinee price Monday through Thursday (even in the evenings!). So, you only pay full price for a weekend evening.

Lots of African Americans live and work in Tallahassee. You see them everywhere. I first realized their numbers when I saw that there are so many of them working at the stores, restaurants and banks (more than I was used to seeing in Tulsa). All the ones I've encountered are very friendly. In fact, the people in this town are more friendly in general than in Tulsa (they chat with you more at the grocery store, etc). People say Tallahassee looks and seems more like Southern Georgia and there really is that southern hospitality here. Bring it on!

The temperature here is milder than Tulsa, but it's not Southern Florida so we do have seasons here. The daytime high has been between 60 and 70 degrees and the nighttime low has been 38 degrees for a couple of weeks now. We haven't turned our heat on yet because of the warmer sunny days. We just snuggle under the down comforter at bedtime so we stay toasty. With these temperatures and the good amounts of rain, some of the green underbrush (clovers and such) that got scraped over during the yard clearing is sprouting up again. And the rye grass we planted is growing just fine. It's weird to see so much green grass (and even new growth) in November! You don't see that in Tulsa (it's all dry and brown there). Ah yes, and Tallahassee has lots of groovy vegetation and trees such as Spanish moss, Palm trees and Banana trees.

Tallahassee has many parks, small lakes and many many churches. And the town has quite a few regular events, such as the Downtown Marketplace which is where people sell food and art at booths downtown every Saturday from March to November (and there is live entertainment). When walking around downtown I don't feel unsafe. In fact, I haven't even been in a shady part of town yet (don't even know where they are). It's a college town so there are lots of students, but it's also a family town that has fought to keep out the naughty strip clubs.

Yes, I'm glad we landed in this town for Craig's schooling and bought our first home here.

Chicken Burrito RECIPE

Here is a quick and delicious recipe:

Chicken Burrito Bundles

2 c. chopped cooked chicken
1 (1 1/4 oz) pkg taco seasoning mix
1 (16 oz) can refried beans
6 (8") flour tortillas
1 (8 oz) pkg shredded Cheddar cheese
3 plum tomatoes, diced
1 sm onion, diced
salsa

Preheat oven to 350 degrees. Place cooked chicken and seasoning mix in a large heavy-duty ziplock bag; seal and shake to coat. Spread beans down center of tortillas. Top with chicken, cheese, tomatoes and onion; roll up tortillas. Wrap each in aluminum foil and place on large cookie sheet. Bake 15 minutes. Serve with salsa. Serves 6.

You can easily tweak this recipe. I made this last night but I didn't have any tomatoes so I just used a 10 oz can of Rotel. Get creative! Let me know what variations you try.

A nice evening at home

Tonight I put together a quick dinner I've never made before--General Tso's Chicken (frozen breaded chicken bites with ginger/garlic sauce packet...from Sam's, I think) with brown rice and stir-fried broccoli & cauliflower (seasoned with bottled stir-fry sauce). It was rather tasty and Craig discovered a piece of breaded chicken that looked just like a little duck. We put the duck in sauce (so it looked like he was swimming) and took a picture. Isn't he so cute?



After dinner we hung up some globe lights in the living room. We had white Christmas lights there but one string stopped working (after like 5 years!) so we upgraded to the cool globe lights that we found while browsing in Target. I ended up buying a replacement string of white lights (about $2) and we will put those 2 strings hanging above our front porch for nights that we want to sit in our new screened-in porch and enjoy coversation with friends.





I was going to go to the mall to get my free $20 gift card (thanks to Discover) but it started raining and I decided to stay home. This was the first rain we've had since our screened-in porch has been finished so we went outside to see if the rain was staying out of that area. It was raining hard (with lots of thunder and lightning) and the place was dry. Yeah!

We had Super Fudge Brownie ice cream for dessert. This is one of our favorites. It is made by Blue Bunny and you simply must try it if you like chocolate.

We watched an episode of "House" that we had TiVo'd yesterday. House is such a crazy character, always pushing the limits! He's so opposite of me!

We finished the evening by doing random things on our computers (Craig was playing "Second Life" and I emailed, posted to my blog, etc).

Dog Dreams

We have some good laughs watching Minga nap sometimes. She dreams a lot and is an active sleeper. Her muscles twitch, her legs move and she whines or barks (muffled barks with her mouth mostly closed). When she was a lot younger she would do the suckling motion with her mouth (dreaming of momma, I assume). Whenever she barks a lot in her sleep we can't help but laugh because it's just cute and funny for some reason. It would be interesting to see what she's dreaming.

Last night was the first time I can remember hearing Craig talk in his sleep and actually understanding what he said AND remembering it in the morning so I could tell him! He very clearly said, "Good girl, Minga! Good girl." Haha! How sweet. We dream of her and I'm sure she dreams of us too.

I love my Discover Card!

I just have to say that my Discover credit card is the best! I've gotten so much free stuff from using it. And since I always pay off the balance every month, I'm not paying any interest or fees.

Here's an amazing fact: Craig and I have not had to pay for a single movie rental during the entire 5+ years of our marriage thanks to our Discover Card rewards. We rent several movies a month on average...and sometimes even more if we are catching up on a TV show like Alias or The Office. So how cool is that?!

With my Discover card I can choose to get cash back, a credit on my statement or rewards such as movie rentals, movie tickets or gift cards to restaurants or stores. Some Rewards Partners even let you double the amount of your reward (accrue $20 in cashback savings but get a $40 gift card!). Plus, for every 3 month period Discover offers 5% cashback on a defined spending category, such as gas, groceries, entertainment, etc. So, if the category is entertainment, during those 3 months every time you rent a movie, go to the theater, go out to eat, go bowling, etc you get a 5% cashback reward on your account (instead of the normal 1% or 2%).

The thing that prompted this post is that I just got a card in the mail from Discover that says for the next 2 months every time I spend $200 dollars at the mall I get a $20 gift card free. I already spent $200 on maternity clothes my birthday weekend so I already get a $20 gift card. I didn't even see that coming! And you know I'll get at least another one because the Christmas season is starting! Wahoooooo!

I know they do all these extra cashback specials to get you to spend more money, but it's still nice and fun. You just need self-control so you don't overspend. It IS possible to work the system! My Personal Financial Planning teacher at ORU warned us about credit cards (their tricks, the fine print, the dangers of overspending, etc) and told us that credit cards don't have to be bad if you are smart/disciplined with them and understand how they really work. He said in this modern day you pretty much have to have a credit card (to rent a car, make hotel reservations, build good credit, etc) so he encouraged us to get a Discover Card or one with cashback rewards. So, I did and I'm soooooo glad!

I've made the changeover

Today I got a Florida license plate for my car! That completes the official changeover from Oklahoma resident to Florida resident.

I got my driver's license within the first 3 days we were here because the Jeep tag expired at the end of July and in order to get a Florida one Craig and I had to get Florida driver's licenses first because both of our names were on the car title. So, now I have a Florida license, tag and a home. And fairly soon I will birth a child in Florida. Yipeee!

Sunlight and random findings

I love it when the sunrays stream through the trees in the morning!



This is the view from our bedroom balcony so I see these awesome rays every morning:







The guys who built our fence found this abandoned turtle shell in the creek:



We found this lovely snakeskin after one of the landscaping guys said he saw what he believed to be a rattlesnake slither under the house (I was paranoid about stumbling across the snake for the rest of the week!):



This rusty old shed was useless to us (it was falling over and the doors didn't close anymore) so we had it torn down (it was full of old paint cans and who knows what else):



The landscapers found all sorts of rusty metal things (car & refrigerator parts mostly) while clearing out our jungle:



Here's an old car (Craig said it was a Rambler) they found smashed and upside down in our yard:



Here's part of what appeared to be an old dog pen fence:



These manholes showed themselves once the underbrush was cleared away (Craig had the city come and look at them...we now know that there are active sewage pipes in our yard, but the manholes certainly hadn't been accessed in years because no one even knew they were there):

AFTER yard pics

This is how our property looks now (cleared yard and new fence, screened-in porch, ramp, staircases and some grass). The projects lasted from the 2nd week of August to the 1st week of November, with some days off here and there.













Inside screened-in porch (the railing tops are wide in here too--so handy!):



Main balcony with new wider railing tops on right side:



Back of the house (there is a large gate on the left side, you can just see the shiny hinges):



See the bright green rye grass growing on the side of the house?:





From the edge of the fence looking down the hill at our yard (it really is a steep hill but you can't tell here):



Someday this yard will all be nice and grassy (good for picnics by the creek!):



View of backyard from master bedroom balcony (the creek is at the edge of our dirt yard...it's green on the other side of the creek):



Left side of yard:



Left side of yard looking towards front (the X marks the spot where the gate is):



Under the front of the house (under the front porch):



Our under the house storage area (under the kitchen):



Front stairs on right side of the yard, which join the main balcony right by the ramp gate and across from the screened-in porch door:





Back stairs on right side of the yard, which go up to the master bedroom balcony:



It's so handy being able to let Minga out our sliding glass door in the morning (she sleeps on the floor in our room) to go to the bathroom by herself!



What's next? Planting grass, plants and trees (hopefully even some palm trees!). We've planted some Wax Myrtles that will make a nice hedge at the northern border of our property and some ground cover grass and Saw Palmettos in another spot. We have already bought more ground cover to plant around the manholes and a Cyprus tree to plant near the creek. We were just waiting to hear back on the palm tree situation before committing these plants to the ground (because they might be in the way of the palm tree planting truck). Turns out the palm tree guy's truck can't get down our steep hill while carrying the super heavy palm trees without tipping over. We are working out a deal to get the trees brought down our hill on a trailer and then the truck can drive down alone to plant them. More on palm trees later....

WANNA COME VISIT US NOW?

BEFORE and DURING yard pics

The guys we hired to build a fence, ramp, stairs, etc are also the guys who totally renovated the house in July 2003 (3 years before we bought it). We randomly met them when we were looking at the house for the 2nd time after we already had a pending contract to buy it. They let us see (and scan) the pictures they took of it during the renovation process. Here are 2 of their pictures before their work began (in comparing these to my current pictues, you will notice that they changed the glass front doors to a regular door and added a kitchen window as well as a dining room window and 3 living room windows on the sides of the house, amongst other things):



The original house didn't have any windows on the right side of the top 2 floors:



The first changes we had done to our property (other than replacing the stove and having an over-the-range microwave installed) was clearing of the underbrush and scraggly trees in our yard. Even though we liked the look of our jungle of a yard, we wanted to have a yard we could actually walk in and play in. The growth was so thick that it was hard to navigate through (I didn't walk or see our whole 3/4 acre property until the jungle was cleared), not to mention the poison ivy and many spiderwebs you'd get all over you. Plus, our realtor told us that landscaping is like the #1 way to increase your property's value (and you get the money you spent on the landscaping back dollar for doller plus more when you sell the house).

We hired 4 groups to tackle our land. The first group cleared out all the underbrush and sprayed to kill the weeds and poison ivy.







The second group removed all the trees we had marked and some dead vines hanging from the trees that we were keeping.





This branch fell during the night and landed right where Craig's Jeep had been parked the day before--it would have done some damage! This prompted us to look into removing the larger trees that were dangerous or had diseases and would become unstable.



Pine tree (lightest colored tree on left) and Sweet Gum tree (by house with lots of leaves) before removal:



Sweet Gum tree has been cut down and the pine tree (it was diseased) is next to go. This picture shows you how tall it was:



Side of house without the Pine and Sweet Gum trees:



Cutting down the big pine:



Pine tree on the ground (notice the heart-shaped base):



Grinding the big pine tree's stump:



The third group dug a ditch to divert the water that rushes down our driveway from the street when it rains, graded the yard to eliminate puddles and smoothed out the ground to get it ready for grass planting.

This young guy had fun smoothing out our yard with this setup (a 4-wheeler pulling 2 crates with cinderblocks on them):



The ditch, viewed from the main balcony:



The fourth group (just 2 guys, actually) built a fence around the house to keep Minga in (and to hide the uglier underneath parts of the house). They also added 2 stairways (from the master and main balconies) so we could let Minga outside in more than one place and she'd be in the fenced yard. They replaced the main stairs up to the house with a ramp to avoid the precarious walkway that has been deteriorating over the years. They made all of the main balcony railing tops uniform in size (parts were skinnier than others). Now they are nice and wide and we can have outdoor parties with lots of people and they can put their drinks or plates on the balcony railings! And, they screened in the front porch, which included making the office balcony leakproof since it is the roof to the front porch.

Back of house before the fence was built:



Craig and his mom (who visited us for a week in October) on main balcony looking down at the fence guys working:



Fence posts on right side of house:



The ditch runs along the outside of the fence along the southern (right side) property line:



The ditch diverts the water to the creek at the back of our property. Here is the full creek on 9-10-06:



Here is the full creek on 10-22-06 (so maybe once a month it rains really hard and the creek is full...when it's not full, the water is really clear):



Craig threw some rye grass seeds on the ground on 10-25-06 and they started growing by the next week. It is only a winter grass, so come spring time we will have to decide how to grass the whole yard (depends on what we can afford). The rye grass is a temporary solution to help control erosion on the hill when it rains (you can see pics of the bright green grass growing on the next post).



This is the dangerous walkway. The driveway has been slowly breaking apart over the years when it rains hard so there are pieces of it and also roots and other things that make this pathway unsafe.



Posts for the ramp:



Ramp without the railing:



Completed ramp (it's such a nice, wide and gently sloping ramp!):



Ramp with gate (so we can truly lock Minga in the fenced area):



The last project was the screened-in porch. There was more work involved than they had originally anticipated, such as having to remove the house siding and move the outside light in order to secure the wooden posts to the house properly. They did a such great job of putting it all back together that you would never even know what all they had to do. These guys are perfectionists and take their time to do things right.



On my birthday, they had a bonfire and burned more of the wood scraps from their projects. I wanted to toast marshmallows and make s'mores but they said the wood was treated and I shouldn't inhale the smoke or anything so I couldn't. Sigh.



View my next post to see the AFTER pics of all these projects!