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Category: Earning & Managing Money

The Debt Avalanche: What Do You Think?

I read an interesting article by Consumerism Commentary last week (hat-tip to The Simple Dollar) on "the Debt Avalanche":

If you have a certain amount of money available to pay off a portion
of your debt each month, even if that certain amount changes, there is
a mathematically correct way of paying off that debt. You can call this
approach the Debt Avalanche. It is similar to Dave Ramsey’s popular “debt snowball” method, with one small but important detail: With the Debt Avalanche you will pay off your debt faster and pay less total interest to banks and lenders.

The simple calculation for the Debt Avalanche
requires only the interest rates for each debt account. This assumes
that all debt accounts have the same tax liability, but if that’s not
the case, determine your interest rate after taxes for this calculation.

Read full article.

When my husband and I got married, we purposed to stay out of debt if at all possible while he went through law school. Now that law school is behind us and we’ve avoided debt this long, we’re really determined to completely avoid debt in every way, shape, and form for the rest of our lives.

We’ve sought to debt-proof ourselves through a number of means: living on less than we make; living on a strict budget; building a six-month emergency fund; communicating openly and honestly as a husband and wife about finances; and investing in good life, health, and disability insurance. Only God knows whether we’ll be able to completely avoid debt our entire lives, but we are quite determined to do everything we can to keep from being enslaved to it.

While you all well know that I am a huge Dave Ramsey fan, since I’ve never been in debt, I personally can’t say what works or doesn’t work with regards to getting out of debt. And I don’t necessarily think the same exact steps will work 100% perfectly for each and every person and situation.

So, what do you think? I know a number of you readers are seeking to get out of debt and I’d love to hear what is working for you. Do you think that Dave Ramsey’s "Debt Snowball" method is the method for debt reduction? Or would you agree more with Consumerism Commentary’s proposed "Debt Avalanche"? What has worked for you?

Review: Children’s Orchard


I’d heard rave reviews of Children’s Orchard from various friends for a number of years, but I’d always sort of let them go in one ear and out the other thinking that a store specializing in name brand children’s clothing, furniture, accessories, and toys was likely well out of our budget, especially when it came to used clothing.

However, since I’m always willing to try something once and the girls were in need of new clothes, we decided to stop by our local store a few weeks back. And was I ever in for a shock!

Fellow frugal friends, I’ve been missing out all these years; Children’s Orchard is a goldmine! While there were some like-new Tommy Hillfiger and Gap clothes which I quickly passed by as the price tag was near $10 each, there were boat loads of nice clothes for $4 and less! In fact, I found a number of nice tops for the girls for $2 each.

The store we stopped at was well organized and offered an abundance of clothes from newborn to size 10-14. The average price seemed to be around $3 per item and the majority of the clothes were in great condition. Not all of the brands were name brand–I saw a number of Wal-Mart brands sprinkled throughout the clothing racks–but there were also lots of Gap, Children’s Place, and Gymboree items to be found, almost all of which were very reasonably priced.


[See those adorable almost-like-new matching shirts my girlies are wearing? I found them for $1.99 at Children’s Orchard!]

We had a budget of $25 per girl and I was thrilled that we were able to stretch that to buy enough to last them through the Fall with some extra month left over (well, if Kaitlynn doesn’t up and grow two sizes in two months like she’s been known to do!). A few of the items we purchased were brand-new and still had the tags on!

For those of you in need of 0-12 month clothes, I would especially recommend this store as I noticed most of the prices on those clothes were $1.50 or less–which I consider to be a great price for like-new, high quality baby clothing. Judging by the quantities of clothing at the store we shopped at, you could easily buy your baby’s entire wardrobe for a year or more for less than $50 (or more like $25 if you’re a minimalist like me!).

Children’s Orchard often has storewide sales which would net you even greater savings! You can sign up for their email updates here and be notified of when the store nearest you is holding their sales. In addition, Children’s Orchard will buy back your gently-used children’s clothing. More details on that are here.

Becoming a WAHM: What Are Your Passions, Skills, and Gifts? – Part 4

Once you have determined you’re willing to put in a tremendous amount of effort in order successfully work from home and you’ve streamlined your life and developed organization, and started living on a budget, you’re now in great shape to pursue planning and preparing for setting up your business.

There are thousands of possibilities out there so where do you begin? I recommend you spend some time praying and seeking the Lord for direction, talking things carefully over with your husband, and doing some in-depth evaluation of your own heart.

What are your goals for working from home? How much time do you want to invest? What kind of income would you realistically like to be making?

After considering your basic goals and guidelines, take a few weeks to map out your ideas. Don’t worry about being thorough and organized at this point, just get your ideas down on paper. Just for the fun of it, I encourage you to also write down what your dream WAHM job would be.

Hopefully by the end of a few weeks of thinking through this, you’ll have a fairly large list compiled. Take this idea list and think about it in terms of what your life goals are, what your abilities are, what you are passionate about, and what your likes and dislikes are. If you are married, ask your husband for his counsel and input. Also, ask your close friends for their thoughts and ask other home business owners for input.

It is very important you take your time when thinking through all of these things. The last thing you want to do is to be hasty in your decision-making and end up rushing into something which you quickly find out was not at all what you enjoy.

At the same time, though, don’t get so caught up in the planning and preparation that you never do anything. You’ll never go anywhere if you never do anything, so don’t get stuck in a rut of spending months or even years planning your new business venture and then end up never doing anything. A month or two of planning and thoughtful decision-making should be plenty.

For those of you who currently work from home or own your own business, how did you first decide to do what you are doing? What has been your greatest source of inspiration and how have you meshed your passions and gifts into a marketable skill or business venture?

Living like no one else

I just got a less-than-nice comment from someone about our van situation. The basic gist of the comment was (I’ll edit the part out calling me a liar, etc.): "Why on earth if your husband is an attorney and you make money from home can you not just go out and get a new vehicle??"

Since there are quite a number of people who read this blog, rude
comments are pretty normal and I’m pretty used to it–it’s part of blogging in a public forum. However, after I deleted the comment, I got to thinking…

You know, we could go buy a vehicle. We could take our emergency fund money and go buy another used vehicle or even a new vehicle. We could take our house savings and go buy another vehicle. We could even do what most normal Americans do and just go take out a loan for a new car.

But here’s the deal: while we have money in our bank account, we don’t have money saved or allotted for a new vehicle or even a used vehicle. And guess what that means? We aren’t buying a new vehicle or even a new-to-us vehicle. Not right now at least.

We had money to pay for the car repairs, we don’t have money to pay for a new vehicle right now. We’re very hopeful that the mechanic will have our van in good working order by tonight and we’re very hopeful that after replacing just about everything there is to replace on it, the van should run beautifully like it used to.

What we thought was a small problem with the van has mushroomed into weeks of work. Just when we thought it was fixed, something else would go wrong with it and we’d have to take it back to the mechanic again. It has been a much longer and costlier process than we were ever expecting and yes, it’s been frustrating, but that doesn’t mean we just throw in the towel and go buy another vehicle.

Have we considered buying a new vehicle? Absolutely! Do we wish we had piles of cash sitting around without a name on them so we could just go buy a new vehicle and forget all the hassle of trying to get our much-used van fixed? You better believe it!

But you know what? Waiting until we can afford to buy something and trying to make do with what we currently have is how most people used to live. We’re learning patience, we’re learning flexibility, and we’re learning to be content with what we have.

We still have one running vehicle and if need be, we can go back to being a one-car family again. It’s not my first choice, but we did it for a few years and I’m willing to do it again.

Yes, we’re "living like no one else". Yes, a lot of people think we’re really crazy. Yes, sharing what I share on my blog means that some people aren’t going to understand, are going to question why we’re doing what we’re doing, and some people will say rude comments about our life choices.

You know what, though? While I don’t like car problems and I’d not have chosen the kinks in our plans they’ve resulted in the last few weeks, I’d much prefer to wait until I can afford something before I buy it. I much prefer not having to live paycheck-to-paycheck. And I much prefer not being slave to the bondage of debt.

We’re living like no one else so that someday we can live and give like no one else!

Financial Shape in 2008: Monthly checkup

It’s July and time for another Financial Shape in 2008. The year is halfway over! How are things looking for you financially?

Here’s our update:

Short Term Financial Goals for 2008

1) Have our fully-funded emergency fund in place (6 months’ worth of living expenses) by the end of April. As of March 11, 2008–DONE!
2) Switch health insurance plans and open an HSA. We
were approved for our new health insurance plans in April and have also
set up our HSA. Done!

3) Start up an IRA and invest at least 5-10% of Jesse’s income in this. Started in March. (We plan to increase this to 12-15% of Jesse’s income as soon as we purchase our home.)
4) Open up a mutual fund for each of our children and invest $50 per child per month in it. Started in March.

5) Save up and invest $30,000 this year towards paying cash (100% down) for a house in 3-5 years. Now
that Goals 1-4 are finished, we’re working super hard on Goal #5!

It seems like the story of our life recently has been unexpected expenses! Between medical bills, increasing costs, and car problems after car problems after car problems (oh and did I mention car problems?!), it’s been a little mountainous here and I’ve had to fight the urge to feel frustrated. I know God is allowing these things to teach me patience and perseverance.

At any rate, I am here to tell you that we put a whopping $0 in our house savings fund this month. I’ll be honest and tell you that I’ve struggled to not feel incredibly discouraged about this–especially because I had high hopes for this past month. However, I am trying to learn to turn my would-be frustrations and discouragement into gratitude.

While we ended up spending a lot more money than we’d planned on and we didn’t save anything like we’d hoped, we have so many things to be thankful for: a nice rental home with air-conditioning, plenty of food to eat, an emergency fund, steady income, two beautiful daughters, one running vehicle (currently!), good friends who’ve encouraged us so much recently… the list could go on and on. We have so much more than we need; we are truly blessed!

Hopefully next month I’ll have some savings to report, but for this month, I’m trying to focus on counting my blessings instead of calculating our lack of savings.

How did you do in June? Whether
or not you posted financial goals for 2008, please take a moment to
post about your financial successes and failures in June and the areas
you hope to improve in July. Then, come back here and leave your link
below. If you don’t have a blog or would rather share anonymously, feel
free to leave your update in a comment. Let’s all keep each other
accountable to be better stewards of
our resources!

Reader Tips: Family Dollar, All You Subscription, Wal-Mart School Supplies, Aunt Millie’s Bakery Outlet

Family Dollar: $5/$25 – From Richael:

this weeks family dollar ad (which came in the mail on Wed. here, NC)
there is a $5 off $25 coupon. My CVS says they honor competitor’s
coupons (but not sales ads), so I’m going to try and use it this week.

All You: Magazine Subscription Deal – From Jana

I’ve been reading about how you and others really enjoy the All You Magazine, so I finally picked one up.  Now I love it, so I searched online for the cheapest subscription I could find and I found one that is a great deal!

Get 2 years (24 issues) for only $20 (most others had that price for only one year!). I found it here. I clicked on "shop now", then it even let me pick my local school to receive 40% of the cost for their fundraising.
It was very simple, and I’m hoping all goes well and I should receive my copy in 8-10 weeks!

Operation Smile: Help Children Around the World Through a Simple Click – From Bethany:

Oral-B will donate one foot of dental floss to Operation Smile for every
visitor that clicks through this link on their web site. No strings
attached, no personal information required.  It takes less than 5
seconds. Operation Smile is an organization that helps repair facial
deformities in children throughout the world. 

Wal-Mart: School Supply Deals – From Margaret and Sarah:


I was at Wal-Mart this morning and they were busy setting up school supplies. Even though the sales flier hasn’t come out yet I could already buy supplies at sales prices and beat the crowds. I couldn’t resist the 24 pack Crayola crayons for $0.22, RoseArt washable markers
11 count for $0.60, 10 count PaperMate pens for $0.50, etc. -Margaret

I went to Wal-Mart this afternoon and they had school stuff out and on sale!  Here are the few things I remember:

Crayola Crayons (24 ct.) were 25 cents
Rose Art crayons (24 ct) were 17 cents
one subject notebooks were 5 cents
2 pocket folders were 15 cents
Elmers school glue was 22 cents
Crayola colored pencils (12 ct) were 88 cents


Aunt Millie’s Bakery Outlet – From Dawn:

I have been shopping at the Aunt Millie’s Bakery Outlet
for quite some time and feel the need to share. Aunt Millie’s brand has
bakeries in Indiana, Illinois, Michigan, Kentucky and Ohio. Where
there are bakeries, there are outlets or thrift stores for their
bread. The ones near me in Ohio have "Monday Madness" and all their bread is 59 cents (this includes packages of:  donuts, bages, english
muffins, whole grain loaves, sub buns, hamburger/hot dog buns, potato
bread, onion rolls, pita pockets, etc)  All of their food freezes
exceptionally well and is so worth the drive! It definitely helps the
grocery budget when I can spend $4 and get enough bread for several
weeks if not a month if I do it right!

So, from what I could find on the internet, there are bakery outlets in
Indiana: Muncie & Warsaw
Illinois: Bolingbrook
Michigan: Bay City
Ohio: Sidney, Greenville, Celina, Dayton