January 2012!

(This was supposed to post yesterday and it was still in my drafts! Ooops!)

A new & exciting year for FPU!

We had to get a new transmission this month so that was a bummer, but thankfully we were able to cash flow all but $131! So only $131 had to be taken out of our emergency fund! That did limit other extras that we can normally put toward the EF, but I’d rather do that then take it completely out of our EF. Of course if we absolutely had to I would, but see how much more self conscious we are about what we do with our money. 🙂

An Update on Baby Step 3… we had an appt this week with an ELP for baby step 4 (investing!)!He’s the only one in the area and he’s been doing FPU since 2000! He knows his stuff and he is a super nice guy!

I have to say, I was contemplating jumping ahead and he really helped us out! I was thinking of jumping ahead because technically we would have our emergency fund in a couple of months and the rest I wanted to save was just extra. I did this ‘simple living money diet’ to our current budget and we will be able to squeeze about $400 out and I was thinking we could use that to invest.

WELL, he suggested that we have a solid 12 month emergency fund since Jared is self employed! He calculated we would need 36K for our emergency fund! I told him we had planned on 40K and he said PERFECT! (That extra 4K is for part of our health insurance we would need to save. We are making an appt with an ELP for health insurance to see exactly how all that will work and how much we will need.)

I love that this guy actually told us to keep SAVING and to come back when it’s funded so we can be better ready to invest. And he knew that would take us about a year! He’s a keeper!! 🙂

Baby Step 1-

$1000 emergency fund in the bank. Completed September 2010.

Baby Step 2-

Pay off all debt (except the house) using the debt snowball. Completed September 2011.

Baby Step 3-

Fully funded emergency fund of 3-6 months of expenses. (Because of our circumstances we are going for 12!) THIS IS WHERE WE ARE AT!

What’s in our savings account:

Baby Step 3b-

After you have a fully funded emergency fund you can start saving for things that you want. This is where you would save up for a house or something! ((We will eventually be saving for a newer vehicle possibly or something else, but this is when you will do it because your risk is decreased significantly with your fully funded emergency fund in place!))
COMING SOON

Baby Step 4-

Although we are no where near retirement it’s time to start investing 15% of our income!
COMING SOON

Baby Step 5-

Preparing the little guy (financially) for college
COMING SOON

Baby Step 6-

Start paying off the house early! What could we do without house payments?? Oh don’t even get me started! I cannot WAIT for that!
COMING LATER RATHER THAN SOONER IM SURE 😛

Baby Step 7-

Build wealth & give

7 BABYSTEPS :

Baby Step #1: $1000 emergency fund ((Can be completed in 1-2 months))
Baby Step #2: Pay off all debt except the house using DEBT SNOWBALL. ((List your debts in order, from the smallest balance to the largest. The idea of the snowball is simple: pay minimum payments on all of your debts except for the smallest one. Then, attack that one with gazelle intensity! Every time you pay off a debt, you add its old minimum payment to your next debt payments. So, as the snowball rolls over, it picks up more snow.)) ((Avg time to complete this is 18-24 months))
Baby Step #3: 3-6 months expenses in savings completes your fully funded emergency fund
Baby Step #4: Invest 15% of household income to Roth IRA’s & pre tax retirement ((You do steps 4, 5, &6 all at the same time))
Baby Step #5: College funding for your children
Baby Step #6: Pay off your home early
Baby Step #7: Build wealth & GIVE!

Find an FPU class in your area!

This is our Journey through FPU!