get rid of debt and build wealth with virtual envelopes

If you know me, you know I’m crazy about Dave Ramsey’s Drive Free Cars presentation. You also know that we’ve been implementing it for several years. DH paid cash for his Land Cruiser and now we’re saving for the long haul (heh!)

We were talking during a long drive yesterday about how this now gives us $1,060 every 9 weeks. Wouldn’t you love to have a system that at no cost to you, hands you over a thousand dollars every 9 weeks?

It just boggles me.

Anyway – here’s our summary for April month end:

Total deposits: $480
Total earnings from short term trades in the stock market: $99.12
Grand total as of April 30: $10,355.60.

This could be you! Ditch your debt and save your car payments. Be your own bank!

When yesterday’s post went live, I saw I had done another similar post in January, 2012.

Just for fun, I looked up our mortgage balance that month.

Today, it’s half that.

Does this stuff work?

You bet it does.

* The reduction hasn’t been just from refrigerator savings. We send any extra money we find to the mortgage period. This has been money from refunds, rebates, forgoing Starbucks on road trips, etc. We save it – we claim it!

I apologize that this post is so short.

It’s important though.

Check it out!!

Tree House

Here’s an interview with the founder of Tree House. I have a B.S. in Computer Science and worked in the field for over 25 years. Everything Ryan Carson is saying is true. Degrees aren’t necessary as long as you can demonstrate that you have the skills. It is also going to be important that you know how to speak and write well using proper grammar. Written communication is a big part of working in a technical environment but again, you don’t need a college degree to use proper English.

(Photo by George Cavanaugh)

I’m going to start giving examples of how we find more money in our refrigerator!

Don’t think of this as cleaning. Think of this as finding free food and diverting the saved money where you wish. For us, any extra money goes to our mortgage.

I clean one shelf every day. While I’m in there, I check out the rest of the fridge to see if there are leftovers we can use for a free meal.

To get started, all you need is something to wipe the shelf. I use Clorox or Lysol wipes from Costco. I also like vinegar and water used with a paper towel.

Now start on the top shelf. Take everything off the shelf discarding anything that’s obviously too old or out of date. Wipe the shelf and put the contents back. Check out the other shelves quickly and try to find food you can use today! When you are done, put something distinctive on the cleaned shelf. Tomorrow work down to the next shelf.

That’s it! Do it every single day, and you’ll never have a disgusting job on your hands. It gets faster and easier every time. It also helps to keep you from buying food you don’t need. When we started the Dave Ramsey baby steps, we found that food was just under housing as our biggest expense.

I take it a step further. If I find dinner lurking on the shelves (there’s half a chicken leftover along with veggies on our third shelf right now), I move $5 from our food category to the mortgage category. We keep getting closer and closer to 0 on that mortgage and it’s getting exciting!!

To take this one step further, keep a roll of masking tape and a Sharpie in your kitchen. Use them to label any leftovers with the day’s date. It will make your job of deciding what to toss as you clean a shelf each day (3 days is a good rule of thumb for leftover cooked food).

Why should you care about our bank account balance? Because we’re piling up a ton of money by saving a former car payment and growing our earnings at least 12% this year. You can too!!

Dave Ramsey’s “Drive Free Cars” was the inspiration for this project. I was trying to figure out how to earn at least 12% a year right out of the gate with our first $100 deposit and my husband pointed out I was still paying someone $20 a week to do our ironing. This was 20% more each week!

Weekly Update

Is it just me or are the weekly updates getting a little boring? I’m thinking of moving them to monthly updates.

This week our total has grown to $10,196.63. The same deposits and were made and I flipped a stock making $19.97 this week.

I’m starting to get more emails and messages asking about our plans for investing the money.

George and I haven’t had much opportunity to discuss it as I’m gone a lot now looking after my dad. I’m going to share my thoughts about it but don’t hold me to them! This money represents a team effort after all. Once we have made a decision together, I’ll share it here.

But for now, this is how I feel about it. The standard rule of thumb is not to put money into the stock market that will be needed in five years or less. We hope to make it 4 1/2 more years before buying another car. I have over 215,000 miles on mine and I depend on my car to help with family commitments.

I try to grow the money at least 1% each month now (over the extra ironing money that’s deposited each week). You’ll see me post (like today) that I made some money flipping a stock. This means I bought 100 shares of a stock with the intent of taking a quick profit. This month, the goal is to make $100 and I’ve made about $60 so far.

I scan stock screens from Investors’ Business Daily (Investors.com) and have the best luck with the screens containing names of individual stocks that have the highest earnings. Another screen that has done well for me is the one with stocks being purchased by mutual funds. Right now, I check out the ones that trade around $20 a share. This is because I don’t want to put all the money in our DFC account at risk. If I buy 100 shares of a stock trading around $20, then only 20% of the amount is at risk (never forget – what goes up can also go down).

After I find those stocks, I look up their charts. I like to look at the last six months and I like to see graphs that go – well – up. A nice steady incline is exactly what I want. I want to jump on for a short ride picking up a quick profit and getting right back out. Most of the time I’m in cash and most of the account is in cash anyway.

Dave’s video shows you can have around $11K for a new to you car every 6 years if $475 is invested each month and if it earns 12% each year. I think if we keep about $11k in cash, we can start putting the rest into a mutual fund. That way, we can reap the benefits of using a professional investor while keeping enough cash on hand to replace a car should that become necessary. I wouldn’t feel this way if my car didn’t have such high mileage. I would hate to be in the market, see it go down and suddenly need to replace a car.

It will be interesting to see what George thinks. He has a great mind for numbers as a chemical engineer and he hatched the whole ironing plan that got this started for me.

I know from the emails I get that some of you have money in reserve to pay cash for your own car replacement. What are your plans? What do you think of mine?

I’d love to hear your thoughts even if you don’t have your own DFC fund yet. I could often see things others could do even when we were paying off our consumer debt. I also enjoy questions you may have. We’ve been transparent showing how a modest car payment can grow dramatically and we don’t mind questions at all. The questions help provide material for future posts and they always make us think.

Thank you all for the well wishes and prayers for my dad. He’s settled into the old St. Mary’s hospital for now and he likes his new surroundings. Meanwhile we are helping him find a nursing home with hospice that he likes. It’s a bit of a challenge as his oxygen requirements are quite high. There is a lovely VA facility in Knoxville, but they can’t admit anyone who needs more than 5 liters. Dad is doing well right now and he’s enjoying visits from friends and family.

Why should you care about our bank account balance? Because we’re piling up a ton of money by saving a former car payment and growing our earnings at least 12% this year. You can too!!

Dave Ramsey’s “Drive Free Cars” was the inspiration for this project. I was trying to figure out how to earn at least 12% a year right out of the gate with our first $100 deposit and my husband pointed out I was still paying someone $20 a week to do our ironing. This was 20% more each week!

Drumroll ….. our Drive Free Cars balance is $10,016.48. We crossed the 10K mark yesterday which was also our wedding anniversary (we’ll celebrate after I get back home).

Reflecting on the last year and a half, I can honestly say I haven’t missed the money. We were spending it before on car payments. Now we let it pile up and we’re putting it to work.

Were we happier when we spent it on car payments? No – we’re happier now.

Dad hit a pretty big bump in the road and he’s back in the hospital now. I’m still out-of-town helping with his care and some of the things he needs done at his house so posting will continue to be minimal for now.

This is such a small example but today it’s huge to me.

I’m home for the weekend. I told George I felt like I had a two day pass to Tokyo (we watch too many old MASH episodes) as I left dad’s to head home Saturday morning.

When I came in, I noticed the registration for my car sitting on the counter.

Once you get rolling with CheckMATE (or any other budget program you chose to implement) you divide these yearly bills by the number of pay periods in the year. George gets paid weekly so for this annual bill, the magic number is 52. We keep our budget on an Excel spreadsheet and I refer to it as I allocate his pay each week.

We set up a category for car registration and every week, $5 goes into that category.

It took me about 2 minutes to write the check and find a stamp.

With everything else going on in my life right now, worrying about a bill isn’t one of them. For that I’m extremely thankful. Should dad get much worse, the bill won’t be forgotten. It isn’t due for another month but again, it’s just one less thing to worry about.

At first, you may not think of every item that will come in. Just start with what you know. As new bills come in, calculate how much you need to allocate each pay period and adjust your budget. After a year or two, your system will just roll along. At that point, any new income (or any bills paid off) become surplus and the process reverses. You start figuring out what to do with extra money instead of the reverse.

Why should you care about our bank account balance? Because we’re piling up a ton of money by saving a former car payment and growing our earnings at least 12% this year. You can too!!

Dave Ramsey’s “Drive Free Cars” was the inspiration for this project. I was trying to figure out how to earn at least 12% a year right out of the gate with our first $100 deposit and my husband pointed out I was still paying someone $20 a week to do our ironing. This was 20% more each week!

The new balance is $9,896.48 after this week’s regular deposit. During the month of March, I made our regular deposits and also earned an additional $144.85 after commissions doing short term trades in the stock market. I try to challenge myself to grow the balance at least 1% each month. The stock market gains for March are well above that mark.

I’m still with my dad. He’s home now and his wife is back home too. It’s sweet (and sometimes funny) watching these two (she has dementia) trying to remember where things are as they begin to get back into a routine and manage their lives again. Dad’s slowly gaining strength and beginning to think about assisted living for them.
I’m also thankful neither one is in much pain other than the “normal” aches and pains of being in their late 70′s.

Thank you so much for the emails, messages and especially for your prayers. They are working!!

Why should you care about our bank account balance? Because we’re piling up a ton of money by saving a former car payment and growing our earnings at least 12% this year. You can too!!

Dave Ramsey’s “Drive Free Cars” was the inspiration for this project. I was trying to figure out how to earn at least 12% a year right out of the gate with our first $100 deposit and my husband pointed out I was still paying someone $20 a week to do our ironing. This was 20% more each week!

Another quick update (and another week with dad). The new balance is $9,776.48.

Since Dad is our focus these days, here’s his update. He was in the hospital 11 days with complications arising from his lung cancer, COPD and other health issues. He was discharged Wednesday and taken back by ambulance the next day.

I am so tired! I’ll never understand why spending so much time in hospitals is exhausting but it is. I learned last night to just take a picture of the room number and text it to whoever needs it. My brother came in from North Carolina arriving at the hospital late last night just a few minutes after I left at 10:30. I gave him the room number with two digits transposed. He came over to the house about an hour later just weeping. He said he couldn’t even recognize dad and that dad couldn’t recognize him. We realized this morning he had gone to the wrong room thanks to moi {face palm}.

The poor man sounded like dad and had glasses just like him. He was bald but my brother expected that with chemo (for some reason, dad isn’t losing his hair). We explained to the nurses and they said that particular patient never gets visitors. He’s also mentally confused and can’t remember events as they unfold. I guess we unwittedly sent him a visitor in the middle of the night (Jim spent a good half hour visiting with him) and thankfully, it provided a lot of humor this morning.

Dad thought it was hilarious. He’s the hero of the lung floor as he shows so much spunk, humor and determination to get better (he’ll be 80 in May).

From now on, I’m taking pictures and texting them. I’m just too tired to deal right now!! Meanwhile, Drive Free Cars marches on.

Why should you care about our bank account balance? Because we’re piling up a ton of money by saving a former car payment and growing our earnings at least 12% this year. You can too!!

Dave Ramsey’s “Drive Free Cars” was the inspiration for this project. I was trying to figure out how to earn at least 12% a year right out of the gate with our first $100 deposit and my husband pointed out I was still paying someone $20 a week to do our ironing. This was 20% more each week!

This will be a quick update. I’ve been out of town helping to look after dad. The regular deposits have been made though (thank God for direct deposit) and the new balance is $9,656.48.

That’s one of the beauties of this plan. It keeps working for us allowing me to concentrate on more important family matters right now.

Have any of you decided to start your own DFC fund? I’d love to hear from you in the comments (or you may find my email address on the “about” page).