Budgeting

**freedeal** · 04-14-2006, 11:56 AM

When we first realized that we shouldn't have any debt I did a budget but somethings I wasn't willing to give up. So against the Dave Ramsey plan, we didn't stop our savings contribution and we didn't stop our retirement. We also didn't stop the college savings accounts which probably would make sense.

We still put the same amount in savings and retirement we just took what we considered our discretionary money each month to pay off the two bills we had. Depending on the month we can have $500 - $700 over to put on debt.

When you started your debt reduction plan did you stop contributing to your retirement funds, savings accounts (mutual funds), and kids college accounts?

Just curious did you go all out or just use your "latte" money as David Bach calls it for debt reduction?

guest7 · 04-14-2006, 12:32 PM

I felt as thought the savings was just as important. 401K, College, Emergency fund. Although, I didn't have huge amounts of debt either.

But I feel that if you have huge amounts of high interest debt... it would make more sense to stop the savings, temporarily. Put every blessed penny to paying off debt. The savings interest rate just doesn't beat the cc interest rate.

You'll be amazed how quickly you can pay it off. And the freedom of it all. Then stack onto the savings.

But I can understand your concern- do you really want to stop the college savings to pay off debt? The child(ren) are going to need it.

From personal experience. I was not able to save while the children were young. I was a single parent. Now that College is here, I'm finding ways to pay it. I am in a better position today than 10 years ago- financially. But I sure wish I'd saved. It was too hard or so I thought.

Same thing for the 401 K, even just a little savings will grow so much over time. So it's hard to stop paying it knowing what it'll be worth in years.

**SHOPGIRL** · 04-14-2006, 12:33 PM

I continued to fund my retirement. I contribute $1000 a month. I did contribute $1100, so I just cut back $100. As far as paying off debt, I try to put as much as I can toward debt reduction each month. I'm also working on building up my EF.

**PeacewithMyself** · 04-14-2006, 12:51 PM

We contribute to our 401 and retirement, the max amount.

We just try to save as much as possible. Our goal is 10,000 in the emergency fund. Then saving about 5000. cash for a new to us used small pickup to replace the big one. (It's 15 years old and only used for moving items and garden work. We only carry insurance on it in the summer.)

Budgeting has been fun really. We have it on excell and everything we spend is logged on to the budget sheet. We know right where we are all the time.

**MandiDawn** · 04-14-2006, 06:59 PM

I kept going in my 401k. I didn't have so much debt that I was going under, and I want to be able to retire on time, so I kept going on that. I already had my EF in place, just never had a plan after that lol. Now that I am pretty much caught up, I have started an account for house repairs and I also purchshed some stock in my company this year. Kinda going against his plan, but I figure I should do all this now while I don't have kids, because you never know what the future will bring.

**frugalfarmwife** · 04-14-2006, 08:25 PM

We continue to contribute to our emergency fund, a truck fund for hubby, a vacation fund and hubbies 401k. I'd like to have the mortgage paid off quicker but the more we have in savings and the 401k the better I can sleep.

kj

**AmyBoz** · 04-14-2006, 08:39 PM

We continue w/401k and 403b. We need to get started on college and will when I go back in September. Everything else toward debt.

**dcompton** · 04-15-2006, 06:37 PM

I agree with Frugalfanny. I think it depends on how much debt and what kind. If it isn't overwhelming and it's not high interest debt, it makes sense to me to continue saving and funding retirement and other long term goals, while paying it down. Your age should be factored in too, I think, when evaluating how to divide the money pot. For my part, I have continued contributions to retirement, but not increased them, as I would like to. That will have to wait until mid-fall probably. And in my situation, a large EF that I am beginning to work on more seriously is just as important as paying off the debt. It's all a balancing act.

**freedeal** · 04-15-2006, 06:48 PM

Thanks for all the replies. The debt we have is 0% interest. Part of it is orthodontist and the other is doctor stuff that was left over after the insurance paid.

Currently it is $7000 and should be paid off by the end of the year.

I am 40 and don't work. We have a nice size EF and DH has enough time built up for 6 months at work so if he were sick or couldn't work his salary would continue for 6 months before he wouldn't have would be without pay and by that time disability insurance would kick in.

I think I like the peace of mind I have still contributing to our savings and retirement. And since our debt is 0% interest I think this may be best for us.

**frugalnana** · 04-16-2006, 09:23 AM

We still contributed to 401 and savings. We just scaled back a little on it until we have everything paid off which hopefully will be in August. We are going to sell our house and buy one where we have no payments. Just waiting until son graduates this May. We've been looking and we have found a few places that need minor things fixed or painted. But we have to paint the walls in this house and fix the posts on the deck where my lovable Bruno chewed them to pieces.

**Vannie** · 04-16-2006, 09:58 AM

Originally Posted by freedeal

Thanks for all the replies. The debt we have is 0% interest. Part of it is orthodontist and the other is doctor stuff that was left over after the insurance paid.

Currently it is $7000 and should be paid off by the end of the year.

I am 40 and don't work. We have a nice size EF and DH has enough time built up for 6 months at work so if he were sick or couldn't work his salary would continue for 6 months before he wouldn't have would be without pay and by that time disability insurance would kick in.

I think I like the peace of mind I have still contributing to our savings and retirement. And since our debt is 0% interest I think this may be best for us.

I think you are doing the right thing.

Even though my family was poor, my brothers and I were always told put money away for 'later', pay yourself first. The amount does not matter as long as you do it religiously. When I started cutting back to the bone and paying off a huge debt, I never stopped putting money into my retirement accounts. I am celebrating my first year of retirement and have not regretted it. I have not yet dipped into my retirement money, but just knowing that it is there makes me feel secure and better appreciate the value of a dollar.

**ironmaiden** · 04-16-2006, 05:43 PM

Our only debt is our mortgage. And it's a low rate 4.5% and for our area we have "little" left about $80,000. And about 7 years left. We'll have it paid off way before the kids are ready for college - thus that money will then go toward college funds.

We are putting money into DH's 401K. But not putting anything in for my IRA - I'm SAHM for now. Some years we have. I did put a decent amount of money away in my name when I was working and I plan to work part-time again in a few more years.
Right now extra money will be put into fixing up the house - we have a few more things to do - replacing windows, rebuilding decks, blinds for the family room, insulation, baseboards.