Drive Free Cars for life!

While taking part in Dave Ramsey's "Financial Peace University", we heard a great example of how you could turn traditional thinking around, and make your money work for you.

They started the lesson out by talking about how the average new car payment for 1/3 of car buyers is $475 with a loan term of 6 years (for a $26,000 car with 9.6% interest). Most people will just assume that they will always have a car payment, and that having a car loan and payment is just a part of life. It's something that you can never get away from!


According to Dave Ramsey, if you turn that thinking around, within that first six years you can get to the point where you'll never have a car payment again!

How it works

Let's say the car you're driving now is worth $1500, and instead of paying a dealer $475/month for a new car like most people do, you save that money for 10 months. At the end of 10 months you'll have $4750, along with another $1500 from the sale of your old car. With that money you can buy a new car worth $6250.

If you keep going along those lines for another 10 months, you'll have another $4750. At the same time you'll probably be able to sell your new $6250 car for just about what you paid for it. That means you'll have $11,000 to spend on another new car, just 20 months after you started with a $1500 car!

Let's say you decide to keep that new $11,000 car for the full six years it would have taken to pay off a new car with a loan. Continue paying yourself that $475 payment every month for the remaining 52 months, and put it into a good mutual fund. If you receive an average return of 12%, then you'll be sitting on over $32,000 dollars after the 6 years is up.

You're home free - free cars for life!

If you go now and buy a nice used car for $12,000, you'll still have 20 grand sitting in your "car replacement fund". If that fund continues gaining 12%, even if you never add more money to the fund, you'll be able to buy $14,000-18,000 cars every 5 years from now on! The interest you're gaining in that account will pay for your new cars for the rest of your life!

How do I retire rich?

Here's the fun part. Once you've established your car replacement fund, from then on you'll be ok to take that $475 you would have used to pay for your new car loan, and invest it in a mutual fund. If you gain 12% interest, here's how the numbers work out if you invest that amount for 10, 20, 30 and even 40 years:

• 10 years - $100,000
• 20 years - $470,000
• 30 years - $1,600,000
• 40 years - $5,588,385

So there you go, Dave Ramsey's plan to drive free cars and retire rich. While it does depend upon you earning a good amount of interest through your mutual fund, as well as some other assumptions about car values, it doesn't sound impossible to me. I know we would never pay $475/month for a car, but at the same time this example really brings home the idea that the returns of compounding interest are something we all need to strive towards gaining.

Let me know what you think about this plan in the comments!

Time to dig deeper

I've been blogging about personal finance now for several months. During that time one person I've heard about time and again is Dave Ramsey and his baby steps. I've gotten a basic understanding of his program through posts that other bloggers have had on their sites, but I always wanted to delve a little deeper.

A couple of weeks ago my wife and I got that chance. Some friends in our church small group decided that over the summer months they would be hosting a Dave Ramsey "Financial Peace University" class at their home every tuesday for 13 weeks. It sounded like a great chance to examine his ideas a little more in depth. We paid the $100 for the class and materials.

Opening the package - what's inside?

We got our package this past week, and today I decided to do an unboxing of all the things in the box, kind of like they do with new tech gadgets on a lot of the technology sites.

So when you sign up for "Financial Peace University", what do you get? First, you get this box:



Once you open the box, this is what you see that it is chocked full of stuff:



Inside you'll find audio CDs, CD-Roms, books, workbooks and more.



Although we'll be watching the lessons on DVD with our group, the lessons are also included on CD in a nice CD wallet.



The package also includes a nice faux-leather wallet to use with the enveloping system. This promises to be a challenging thing to do for my wife and I. We're used to just paying our bills, and then saving/spending whats left over without any kind of an organized budget. Looks like we'll have to use a bit more discipline now!





And finally, they give you a couple of credit card sleeves with a nice reminder printed on it:



Stay tuned

So there you have it, that is the unboxing of the Dave Ramsey "Financial Peace University" membership kit. Lots of great stuff, all of which we'll be getting into over the next 13 weeks.

During our 13 week journey I'll blog about our experience with "Financial Peace University", and update you on some of the tips that we get from the great mind of Dave Ramsey. Stay tuned for more!

Big money on the way

So now that you've got your rebate on the way, you may find yourself with an extra cash that you can use to buy that new TV, save for retirement or use to pay down debt. If you're not sure of when you'll be getting your payment, check out our post titled, "Economic Stimulus Rebate: When will you get your rebate?"

My wife just got out of the hospital after a 3 week stay for a blood clot in her left leg. It was a major health scare and we're just thankful that she made it through alive. Because of her long hospital stay, however, we will have to deplete part of our emergency fund to pay all the bills. Luckily we had good insurance and we'll only end up paying about $2000 of a total bill that will probably be in the hundreds of thousands of dollars. For us, finding a way to spend the $1200 economic stimulus rebate will be easy. We'll be just sending the check directly to the hospitals.

7 ways to use your economic stimulus rebate

Besides medical emergencies, what are some good positive ways to use your economic Stimulus rebate besides just spending it on a big flat screen TV?

1. Pay down debt: This can be a great way to snowflake your way out of debt, although its more of a large snowball. Pay down your smallest debts and work your way up!
2. Bulk up your emergency fund: Take the money you've received and put it in a high-yield savings account to begin building (or continue growing) your emergency fund. In uncertain economic times like these it's a good idea to plan ahead and make sure you're ready in case you lose your job, have health issues (we know about this one) and
3. If you haven't already, start a Roth IRA: Use the money to purchase a long term investment. The earlier you start saving for retirement, the better!
4. Pay for a needed home upgrade or repair: Use the money to replace your old crumbling driveway or to update your kitchen countertops. Try to use the money on things where you'll see a return on your money when you sell, things that will improve your home's value.
5. Donate your rebate: We all have good intentions of donating to our favorite causes, or giving more to the church we attend. We have good intentions but rarely have the money to follow through. Take the rebate that you received and send it to your favorite good cause! Not only will you be helping out a good cause, but you'll get a great feeling from it as well!
6. Go on a mini-vacation: Everyone gets stressed out and sometimes a few days off is just what you need. Instead of spending your whole rebate on a vacation to Hawaii or a cruise in the Caribbean, take a mini-vacation for the weekend to a resort nearby, or stay in a fancy hotel for a couple of days. Take the rest of the money and save it, pay down debt or invest.
7. Make an extra mortgage payment: Make an extra payment on your mortgage and get it paid off sooner. The more of these you can make, the more years you can cut off the life of the loan.

What positive ways will you use your rebate?

So there are a few ideas of some positive things you can do with your economic stimulus rebate. Let me know in the comments what some of your ideas are as well and I'll update the post with your suggestions as the bottom. If you've posted about this topic on your own blog, let me know and I'll add you to the "related links" below as well!

Related links roundup
Economic Stimulus Rebate @ BeingFrugal.net
What to do with your economic stimulus payment @ Consumerism Commentary
IRS Economic Stimulus Check Promotions: 10% Bonus @ My Money Blog
15 Things To Do With Your Economic Stimulus Check @ freefrombroke.com

Calculate your rebate


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The following is a guest post by PT of Prime Time Money. If you like this post, consider subscribing to Prime Time Money via RSS or email.

Because most of us can't take a two week vacation to Hawaii every season, I present some frugal ideas for those quick weekend getaways. The biggest expenses of the weekend getaway are usually the airfare and hotel charges. These ideas focus on limiting or eliminating those big charges.

Friends Are Friends Forever

Some of my favorite vacations have been to places where an old friend is now living, like my recent trip to Calgary. Most of us have a friend from our past that lives in a different city now. Truth be told, if they're new to the city, they probably wouldn't mind some company. After all, you said you'd go visit them when they moved away. Now is the time to take them up on their offer.

Mention to your friend that you are thinking of visiting the city and would like to know the best place to stay. They'll likely offer up their pad for free. The weekend trip just got a few hundred dollars cheaper. Be sure to honor their generosity by picking up a few of the meals when you dine out.

Staying with a friend has plenty of non-economical advantages as well. You essentially have your own tour guide to the city. You'll know the best places to dine, what things are worth seeing, and you'll know the quickest way to get there.

A Camping We Will Go

Forget the long lines at the airport and the nickel and dime charges of the hotels. Break out the tent and go camping at your nearby State or National park. Some parks even have cabins, so you don't even need a tent.

State park fees are usually extremely reasonable and the parks themselves are very well maintained. Your tax dollars go to build and maintain these parks; you might as well get some use out of them. We do this once or twice a year and have a blast every time.

Close Only Counts...

If camping isn't your thing, then choose to stay at a hotel in either a city that you can drive to in a few hours or simply stay at a hotel in your own town. If you're just looking for one night away from the kids, this can be the best option.

Take this opportunity to explore the town you live in and to discover new dining and entertainment spots. If you're like me, there are hundred of places and attractions you haven't seen in your own town.

Your best bet on a hotel is to look for deals at the high-end business sector hotels near downtown. These often go vacant on the weekends and prices drop considerably. You can usually get a nice hotel room for a decent price.

Cheaper By the Dozen

Have some really cool friends? Take your next quick getaway with them. I remember doing this as a kid with my parents and their friends and loved it.

Weekend rental houses and cabins can be had at the fraction of the cost of hotel rates per person. Carpool to get there, group your meals and activities, and your savings really start to increase. Be sure you plan only a few group activities and meals though. Leave some time open for just your spouse and kids.

Have fun!

Can you think of other ways to create a more frugal weekend getaway? Share your ideas in the comments below...

If you're anything like me you're probably wondering when you'll be receiving your economic stimulus rebate check or direct deposit. After checking it out today I found that the IRS has setup a payment schedule based on people's social security number. My wife and I opted for the direct deposit, which means we will likely see our money by the 16th of May (based on my SSN). To get an idea of when to expect your own stimulus rebate, please see below.

DIRECT DEPOSIT

Last two SSN digits:	Payments will be transmitted no later than:
00 through 20	May 2
21 through 75	May 9
76 through 99	May 16

PAPER CHECK

Last two SSN digits:	Payments will be mailed no later than:
00 through 09	May 16
10 through 18	May 23
19 through 25	May 30
26 through 38	June 6
39 through 51	June 13
52 through 63	June 20
64 through 75	June 27
76 through 87	July 4
88 through 99	July 11

The past few weeks I've been reminded in a bunch of ways of just how woefully inadequate I've been when it comes to praying to God in all things. As Christians I feel we constantly need to be in relationship with Christ, seeking guidance, asking for things we need and praising him for all the blessings he has given us. This includes praying about our financial life.

A couple of weeks ago at church our pastor talked about prayer in his message. He said that we need to approach God in prayer, and not just with generalities, but with specifics. A lot of times we don't see the need to be specific in our prayer because we figure that "God already knows what I need". But God likes specifics. Look at the story of the blind man that was healed by Jesus in Luke 18:

He called out, "Jesus, Son of David, have mercy on me!" Those who led the way rebuked him and told him to be quiet, but he shouted all the more, "Son of David, have mercy on me!" Jesus stopped and ordered the man to be brought to him. When he came near, Jesus asked him, "What do you want me to do for you?" "Lord, I want to see," he replied. Jesus said to him, "Receive your sight; your faith has healed you." Immediately he received his sight and followed Jesus, praising God. When all the people saw it, they also praised God.

The blind man asks Jesus to have mercy on him. While it may have been obvious that the blind man wanted his sight, Jesus asked him what he wanted - he wanted him to be specific in his prayer, and step out in faith and ask for what he needed. When he told Jesus what he wanted specifically, and had faith he would receive it, Jesus healed him.

In the same way, I think we need to step out in faith, and ask Jesus for what we need in our financial life - and be specific. Of course we need to make sure that what we are asking for fits within the will of God, but when it does, pray specifically about it.

Do not be anxious about anything, but in everything, by prayer and petition, with thanksgiving, present your requests to God. And the peace of God, which transcends all understanding, will guard your hearts and your minds in Christ Jesus. Philipians 4:6-7

So this is what I've been reminded of this week:

1. We need to be in prayer "in everything".
2. We need to present our requests to God, and be specific.
3. We need to be thankful for what he's already given us.
4. We need to praise him for who he is, and what he's done for us.

So there it is - pray about your financial life and God will hear your prayer. Whether or not your request is granted is up to Him, but Philipians says that when you pray to him, no matter the outcome, he will give you a peace that transcends all understanding. To me that's better than anything that money could buy.

For another complimentary viewpoint on this subject, please see:
Have you prayed about your money situation?

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The following is a guest post by Frugal Dad. If you like this post, consider subscribing to Frugal Dad via RSS or email.

I was perusing a magazine stand the other evening while waiting for a prescription at our local pharmacy. I picked up a copy of the latest Smart Money magazine and realized I had inadvertently let my subscription run out. There were a couple articles I found interesting and I immediately walked away with the copy to pick up my prescription. While standing in line one of those subscription cards fell out and as I bent down to pick it up I realized I was about to violate my own frugal rules. The subscription offer was 12 issues for $12, or $1 per issue! I was about to pay nearly 3.5 times that amount for one issue off the magazine stand; even more if you include the sales tax.

Pay Now, or Pay More Later

This experience got me to thinking - how many other expenses are more costly because I buy things in single quantities, or once a day, week, or month? I have a friend who smokes cigarettes and buys a pack a day, every day, instead of buying a carton. According to him, he cannot afford to buy a whole carton at one time. I don't keep up with the cost of a pack of smokes because I don't smoke, but let's assume a pack costs $4 with the added taxes. A pack-a-day smoker would pay $40 to purchase a pack of cigarettes each day for ten days. A carton of cigarettes costs about $28, $12 less than a pack-a-day purchase. Carry that out to yearly costs and the carton-buyers will save $430 a year!

I'm not just picking on smokers, the same argument could be made for vending machine soft drink consumers, or anyone who buys single items when it is cheaper to purchase in larger quantities. I've noticed many times in grocery stores I will pick up individually wrapped items because they are more convenient for throwing in kid's lunches, or to take on the road for a snack. Following my own advice, I would do better to purchase a bag full of the product and then divide individual servings into Ziploc bags or a similar container.

But I Can't Afford to Buy in Bulk

According to that same smoking friend I mentioned, they cannot afford the upfront costs of a carton of cigarettes because they never have $28 to spend up front. For them, it is easier to spend $4 at a time, even if the costs are significantly higher in the long run. One important thing to remember is that buying in bulk is not always cheaper. Occasionally retailers will use some deceptive pricing tactics to trick consumers into spending more per unit on bulk packaging. This is yet another reason why it is a good idea to take a calculator on shopping trips to calculate the unit price before automatically grabbing the larger container.

The following is a guest post by Nicole Ouelette of Breaking Even, Inc. If you enjoy this post, be sure to check out the Breaking Even Blog.

“Did you watch American Idol?”

“Hey about that guy on the Today Show this morning?”

“When’s the game on tonight?”

When you start paying attention, it is amazing to find how many conversations rely on television. You only start noticing when you don’t have it.

I’ve only had cable television for two years of the last ten. I am now in a period sans television.

You wouldn’t know it talking to me. I follow enough news and celebrity gossip online to know what’s going on. I am only sometimes completely out of the loop.

“Why don’t you just get cable?” people have asked me.

I’ve found there are several reasons (some monetary but mostly personal health-related) to not have cable.

1. I save the money I would pay on a cable bill. The two years I did have cable, it was included in my rent. I find that I can find better ways to spend $60 or more a month. . . like high speed internet.
2. I save money on electricity to run the television. Sure there is a television that we have to watch movies but not running the television means one less electronic device is running.
3. If you do have a favorite show, there are plenty of ways to watch it without having cable. You can watch many shows online. You can also rent or buy the DVD of a season of your favorite program. You can borrow from you local library or a friend for free. You can have it all, without commercials, which brings me to…<
4. I’m not constantly seeing commercials that make me want to buy things. While I can’t prove this, I bet people who don’t watch commercials buy less.
5. Television leads to higher incidence of obesity and depression. When I had cable, I was headed towards both as I ended up watching hours of it every day.
6. I have more time to do other things. I walk the dog, I blog, I read… There are so many things in life that I do that not watching television seems like a very small thing to not do.
7. I have less negative energy in my life. I don’t know if it’s less electromagnetic waves or less reality television but I feel like I have less negativity in my life.

All this said, it is clear that I don’t have the willpower to turn off my television. If you can watch an hour or two a day and then turn it off, more power to you. If you can watch television and still do what you need and want to do, good for you. I am not disciplined in that way. And I think maybe at least a few other people aren’t either.

No matter what, I know that having at least one no television night is doable by everyone. As kids my family had it. We ate dinner and played games usually. It was kind of fun, since we were purposely not turning the television. My mom usually made a special snack. I highly recommend it for anyone. If you live alone, make it the night you have friends over for a potluck dinner. When I lived alone, having my friends over one night a week forced me to socialize initially but after a few weeks, I was looking forward to Wednesday nights and the happiness that only real people can provide.

If you do want to watch less television, 43Folders has some great tips. Actually, I’d recommend anyone who thinks television is too big a part in their lives to skim the article because it’s pretty interesting.

So here’s to more money in your pocket and a happier life being less controlled by a cathode ray box.

The following is a guest post by Lynnae of Being Frugal.net, a blog about frugality and getting out of debt. If you enjoy this post, consider subscribing to Being Frugal.net via RSS or email.

We're living in tough times these days. The news pundits are using the word "recession" freely. Even John McCain said it. The prices of milk, eggs, and gasoline are skyrocketing. And the latest news is that Costco and Sam's Club are rationing rice, because there may be a rice shortage.

With all the bad news, it's easy to panic. Will we be able to afford life's necessities? Is my job secure? Is my home's value going to tank?

As Christians, though, we are not to worry. One of my favorite passages of scripture is Matthew 6:25-27.

"Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more important than food, and the body more important than clothes? Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? Who of you by worrying can add a single hour to his life?

There are some things in life that are beyond our control. We can do what we can to prepare. If you feel your job is in jeopardy, start saving money for an emergency fund. If your budget is tight, pay off your debt, so you can free up some money for your monthly budget. Being prepared is important. But sometimes there isn't time to prepare.

Last year my husband lost his job twice. We were somewhat prepared for the first job loss. We had an emergency fund. By the second time he lost his job, we had used most of our emergency fund. Then thanks to an accountant's error, we ended up owing over $5000 in taxes this month. With all those financial hits in succession, there just wasn't time to prepare.

Still, the Lord tells us not to worry. He's got it under control, even if we don't, which seems to be most of the time in my life. Sometimes the road isn't easy. God never promised that it would be. But God does promise to provide for our needs. Food. Shelter. Clothing.

I can testify that we have never gone without life's necessities, despite being in dire financial straits many, many times. And through our recent trials, even though on paper it didn't look like we were going to make it, somehow we kept bringing in enough money to cover our emergencies.

Today, if you're worried about what the future holds, remember that God will never leave you nor forsake you. When times are tough, He is there. When it seems you're alone, He is there. You may not see it now, but when you're through this storm, you'll be able to look back and marvel at His provision.

Have you ever been in a situation where you've witnessed God's miraculous provision?

This guest post was written by Mike from Quest For Four Pillars. Feel free to visit his site and subscribe to his feed.

One of the most common financial complaints that I hear is that the price of gasoline is too high. I agree that it's tough to see higher fill-up costs at the pump, but I sometimes wonder if some consumers doth protest way too much? Most people have bigger expenses than gasoline to worry about and gas costs are one of easiest expenses to reduce.

Gas prices are visible and frequent

If you own a car and use it regularly, then you will probably be familiar with market gas prices since you probably buy gas at least once or twice a month (or a lot more frequently). Because gas is a commodity and is sold in standard unit prices, it's very easy to compare the price with other gas stations and with the price you paid last week. For most other consumer goods, the unit costs are not as quite as transparent

How much of your budget goes towards gasoline costs?

This will vary widely for different people but in my case we spend about 2% of our net pay on gasoline. This is probably on the low side since we don't use our car everyday. Groceries, on the other hand, take up about 16% of our budget. Keep in mind that our grocery budget includes a lot of common household items such as diapers, kitty litter etc.

My point is that if I want to cut back on our expenses or even just complain about them, I should focus on what's important. Our gasoline bill could double and it wouldn't make a big impact to our budget. If our grocery bill doubled then we would be hurting. I suspect the average consumer has many other expenses which are much bigger than gasoline costs.

How to lower your gas costs

Here are a few ideas on how to lower your gas costs. There are many other lists on the internet which are a lot more comprehensive but I've tried to stick with a few solid ideas that if applicable, will make a significant difference.

Drive less - If you can reduce your driving then you will reduce your gas consumption by a proportional amount. This can accomplished by planning your trips better - if you drive to the grocery store seven times a week then do some planning and cut the trips down to twice a week. If you can carpool or take transit to work instead of driving then you will save money.

Drive slower - the faster and more aggressively you drive, the more gas you burn. No more racing!

If you can't beat 'em, join 'em

Consider investing in oil related companies. The stock prices won't be perfectly correlated to your gasoline costs but over the long run if the price of oil keeps rising then your stocks (I would look into buying an exchange traded fund) should perform well.

Other posts on gasoline prices and driving tips

Frugal Dad says gas prices are still relatively cheap.

My Two Dollars says to stop complaining about gas prices.

Debt Free Revolution delivers pizza so she knows all about gasoline saving driving tips. Check out the funny photo on this post!

Cash Money Life explains hypermiling which is extreme gas savings.

Being Frugal says she doesn't drive as much to save gas.

If you liked this post then please check out Quest For Four Pillars for plenty more just like it!

This post was written by "Toblerone" at Simple Mom. Feel free to visit her site and subscribe to her feed.

Our family follows Dave Ramsey's baby steps, and in a recent post on my blog explaining Baby Step 3, I mentioned "sinking funds." It's a simple financial strategy, and it's not new, but it has enormously helped our family's finances. And I encourage you to start using sinking funds even while paying off debt via the debt snowball.

Simply put, sinking funds are a reserve of money set aside for some purpose. It's a commonly used business and government practice, and it should be part of a healthy personal budget as well. If you think of your family as a company that you've been assigned to manage, it would only make sense to make sure you have funds readily available for the many things that surface on any given year.

Why Sinking Funds are Needed

Think of all those non-monthly payments or purchases you face on a regular basis. For some people, auto insurance shows up once or twice a year. What about new school clothes for your kiddos? These aren't things you spend money on each month, but you still need to pay for them when they show up.

Nothing can screw up a debt-free plan quite like these irregular expenses. In fact, I'll bet that's how many people find themselves in debt.

"What? Christmas is only three weeks away? There's no money in the budget - I guess we'll have to whip out the Master Card."

"Why oh why did our insurance bill arrive just when we had to pay for Sally's recital costume? Looks like it's Visa to the rescue again."

If you know these irregular expenses are headed your way, it would only make sense to set aside a small portion of each budget towards them. This, in a nutshell, is sinking funds.

How Sinking Funds Work

Christmas is an easy example. Let's say you calculate a need of $500 for your Christmas holiday (gifts, decorations, cards, extra food - the whole shebang). It's now March 7, about nine months away until the next season. If you didn't start saving for Christmas 08 in January 08, that means you have nine months to complete your Christmas 08 fund - and 500 divided by 9 is $55.56. That's how much you should list in "Christmas" as part of your regular, monthly budget.

(A side note: some people prefer to budget according to their paycheck, not just by the month. If this is you, and if you get paid biweekly, then you'll calculate how many paychecks you anticipate from now until Christmas, and divide into that number, not the months.)

Sinking Funds For Our Family: an example

Sinking funds is an easy enough concept. But like many things in life, it's one thing to use this method on paper; it's quite another to put your money where your… idea… is. Sinking funds can get really fuzzy and confusing when they're all lumped together in one savings account. Even when you keep detailed monthly records of what dollar is assigned to what, all this can rapidly become overwhelming. At least it did for me.

That's why sinking funds didn't work for us… until recently. Thanks to ING, we can open as many savings accounts as we want, and it doesn't cost us a dime. We can even customize each account with a different name, and we can seamlessly automate transfers from our checking account to our various savings accounts.

We currently have five savings accounts, respectively named "Emergency Fund," "Giving," "Holidays & Gifts," "Vacation," and "Work Expenses." Each month when our paycheck arrives, we have ING automatically transfer a set amount from our checking account into each of these accounts. Most of the money stays parked in these accounts for months at a time, until expenses arise that fit these categories.

When we need funds for these categories, we simply transfer the needed amount back into our checking account and use the amount for that expense. Very easy.

The Takeaway

I should mention that during debt elimination, the type of sinking funds you have should be limited to the necessities. For the most part, you don't need to focus on a family vacation or a new couch when your overarching financial goal is debt freedom. So limit sinking funds for things like quarterly and annual bills and necessities. When you're debt-free, then you can start saving for the extra stuff.

And like I said, I think sinking funds are crucial especially during a season of debt reduction. The last thing you want to do is accrue more debt. With a Baby Emergency Fund of $1,000 and some basic sinking funds in place, it becomes so much easier to know exactly how much you can pile on your debt snowball.

Simple Mom is about simplicity and streamlining the chaotic job of MOM, with a bent towards stay-at-home moms or work-from-home moms. I am passionate about simplicity and balanced living, and am convinced that when Mom is doing well, the whole family thrives. Simple Mom highlights tools and resources that make this possible - it's life hacks for home managers.