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Saturday, March 29, 2014

One Year "Dave~aversary"

It is SO hard to believe that it's only been a year since we started embracing a more "Dave Ramsey" style of life. Want to read about the changes we made? You can do that here! I will be the FIRST person to tell you, we are NOT hard-to-the-core about Dave's system. We don't "live like no one else so we can live like no one else" and I'm okay with that. I know what Dave recommends and we have altered some of the things he suggests to better fit our goals and our priorities. While we DO want financial freedom, we also want to embrace the present. Sure, if we had started our adult lives with these principles we'd probably feel differently about it. But we have children. And our children will only be children for so long so we aren't willing to take some of the more drastic measures in order to get ahead financially. Zach and I both want that balance of spending smart, saving smart, but also enjoying the now. Yes, we travel. That is one of our #1 top priorities and it's something we never plan to stop doing! Yes, we have a nice home and nice vehicles and nice clothing and give nice gifts. But we also have a tight budget, bargain hunt like crazy, and stretch a dollar as far as possible. It's about balance and I feel good with where we are right now as well as where we are headed into the future. 

A year ago when we started our spending smart lifestyle our first thing was to get rid of debt. We had a good bit of medical debt (which was sadly made larger this past year with my foot issues). We also had a couple small loans. We combined all of our savings accounts and paid all of that off right from the start. The next issue of debt, once those were settled, were our cars. Dave would say to sell our cars and drive a junker that is paid for until we saved enough for a nicer car then sell the junker and get something nicer and so on. Again, I wouldn't feel safe having my children riding around in a "junker" and Zach drives wayyyy too much for work to drive one either. We decided rather than paying off my Traverse that we would instead start a savings account for a van. We knew we were going to be trying to get pregnant with Leo and knew the van life was going to be necessary with three kids (honestly, my couple of years with the Traverse really prepared me for a van...automatic doors sounded like heaven to me!). It made more sense to us to have cash to buy the van than it did to pay off a car we weren't planning on keeping for the long haul anyway.

As far as Zach's car goes, our payment is very low for that and for right now we plan to keep getting him a new car every couple of years since he puts close to 50,000 miles a year on a vehicle. I like that he's safer in a newer car and I like the warranty. As long as we can keep our payment the same, we may continue to go that route...until Zach stops driving so much ;) Honestly though Zach LOVED his Flex and really misses it so we may do that as his next vehicle and save to purchase it outright just depending on where he is with his amount of driving at the time etc. 

I was really, really hoping to have enough saved to pay straight cash for a van. However, things come up! You can't plan for medical bills. We also thought we'd have a good bit left in our tax account that ended up not happening. So we didn't meet our goal, but still did amazing for one year of saving. I mean it REALLY makes us both wonder where the HECK our money used to all go before we started living on a budget?!?!?! 

Speaking of the budget...not only did we set up a spending budget for each month but we also worked up how much we need to live month to month and Zach then knew how much he needed to make as well. His career is commission only and it can be tough to know how much money he will make in a given time period! We put ourselves a month ahead. So the money he makes this month we will use to live for next month etc. It has worked out WONDERFULLY. I cannot brag on Zach enough. He met our goal for his earnings every single month for this entire year. Not only that but he exceeded it many months! It was a HUGE blessing to us both. Zach loved having a goal each month because it helped minimize his stress to know what he needed to achieve. I loved that we used money he made from the month prior to life off each month because when I went to pay bills: the money we needed was in the bank! Before this set up I would often be stressing about where we'd come up with funds to pay for bills and would often have to transfer money from our tax account (being self employed we have a tax savings we put aside each month since the company doesn't take it out for us). I never, ever had to transfer any funds in order to pay bills for the entire year. We BOTH felt such less stress and our arguing over financial matters dropped drastically

Knowledge is power. And for the first time in our lives we both have FULL knowledge of where our money goes. That's huge! This knowledge has allowed us to save like we've never ever saved before. We were both focused on getting me into my "forever" vehicle and to have it paid for. Once that step is done then we move on to saving for 6 months living expenses which is Dave's 2nd step! We are PUMPED about knocking through these steps and becoming truly financially free :) This knowledge has also allowed us to give like never before too and our contribution to the Lord was def the biggest it's ever been in our marriage! That is an amazing feeling as we know that ALL of our blessings come from HIM!

Even though Leo won't arrive until late July/early August we decided to go ahead and get this van situation handled now. We waited until after taxes (in hopes that we'd have some left over) and then started the van hunt. I appreciate ALL the advice on which van to get! Doing my research about vans it was pretty clear from the start that the Honda Odyssey is where it's at. It's the highest rated van on like every website and the reviews were always the most positive overall when compared to the other van options. Also when I asked van owners which van they would recommend...every person who owns the Honda says they love it and practically everyone that doesn't own it said they wished they did! 

When we made the decision to go the van route we also made the decision to OWN our first vehicle EVER. Yes, we leased my CRV and we financed to own my Traverse but never had plans to own it. This van would be my first true car I've ever owned. We plan to keep it for 7-10 years. At first we kept saying "we'll drive it till it dies" but honestly, we would not do that! I don't want to be driving some unsafe vehicle that is about to die haha. So our plan is 7-10 years which I feel great about because I LOATHE car buying and am glad we won't have to do it again for a long time :)

It's true what they say...when you are paying cash (or when you are putting down a HUGE downpayment in cash) for something you take the purchase much more seriously. And we have. Even though I knew we'd probably end up with the Honda, we still went to test drive a couple of vans. And then once we decided what was best for us we price compared with three places. We told them what we wanted (getting out of my Traverse when we were upside down it in was important) and we let them come back and tell us their best price. I WISH Zach and I were knowledgable in the world of car buying to where we could sell my Traverse ourselves and then go on some big hunt for a barely used van. But we are just not those people. I hate, hate, hate the entire car buying process and cannot fathom trying to sell our car ourselves. No thanks. I know we could have gotten a better deal going used. I know we could have possibly gotten more for my Traverse selling private. Instead of dealing with all that mess and headache, we got this junk handled in a couple days through some phone calls :) 

When discussing prices we did not mention our down payment. At all. We simply told them we wanted 36 months financing. Which we've also never done. My Traverse? 3.9% APR with 72 MONTHS and still a $500 a month payment. Sure, we did better with that than we did with leasing my CRV but gah that was awful! With each vehicle we learn and grow and do better :) Honda has 0.9% for 36 months so we said we wanted that. We also were concerned with the big number: the total cost. Typically we are only concerned about monthly payment (hence why we end up with dang 72 months and higher interest...) so I went online and "built my Honda" and used that total figure to compare. Obviously we expected to pay less than that price! Our goal was for our bottom line price to be as low as possible and to be able to add in our saved amount as a down payment and make our monthly payment lower than what we currently pay each month for the Traverse but also have the 36 month financing option. 

When deciding which van model to get we went with the EXL model with RES (rear entertainment system). I price compared with the higher models and none of their added features made sense to pay more for. EX-L model was the lowest model that offered the powered lift gate (which, duh, is a MUST!) and when keeping it as long as we plan to leather just makes the most sense. Kids and cloth? Would be a mess! Originally when we decided to add the RES option we did so because the ONLY pictures of it on the Honda website showed the dvd player having the dual screen. Longgggg story short...we would not have added it if we'd known it was just a single screen! The up charge for that package is def not worth it and we could have gotten in cheaper after market. We also added the tow package and the roof rails (must haves with how much we travel!). 

And we called an after market company and are getting extra dvd players installed. Currently Kye uses the drop down in the Traverse on trips (we do NOT watch DVDS in the car unless we are traveling!) and Britt is rear facing so she has to use one of those old school travel dvd players. Which means I have to constantly climb in the back seat to change out movies, fix the sound, etc. It's a pain. If we're going to make this car investment, we're gonna do it right and we're gonna make sure it's something we can use for a long time. So we are having them install dvd players in the second row headrests. The headrests can be installed backwards and that way the rear facing kids can have their own DVD screen :) And they can even do it where we can change out the discs from the front seat!!! Once we no longer have rear facing kids then the head rests can turn back around and the third row kids can watch those and the second row kids can watch the drop down one :) 

We ended up working with our local town Honda dealership as they gave us the best pricing and they forgave the amount we were upside-down in the Traverse. For color I went with the same color as the Traverse. I personally think black is THE BEST car color. But this dark gray really doesn't show dirt nearly as bad so I'm all about low maintenance ;) When the van arrived the FIRST thing I went to see was the DVD player that came with the package. I hadn't gotten to see the dual screen in person and was pumped about it! That's when we realized it was just a single screen and I pretty much flipped out haha. BUT it worked out for the best because they ended up knocking a good bit more off the price to make up for the issue rather than us returning the van. 

Ready to see my new hot mama ride? ;)







 SO pumped for the sunroof :)
 The kids are THRILLED!!!
(and really crazy in their fashion choices that morning haha)


We did not tell them we had the down payment until Zach went to sign the paperwork. I've read that it's best for them not to know you have any money to put down, and our amount was very hefty so I'm sure it would have affected the deal they gave us! After our downpayment we were able to do the 36 month financing at 0.9% and our monthly payment is lower than our payment was with the Traverse which we were paying over 72 months! Lord willing, if we are able to continue to put money towards it like we have this past year then we should completely own it outright within the year. VERY exciting!!! 

I was really, really hesitant about entering the van world. I was ALWAYS one of those women who said "I will never drive a van." Vans just aren't cool. Then I drove the Traverse and I realized that the big SUV world is just as uncool as the van world. I mean no college age guy is driving around checking out mamas in suburbans just like they aren't checking out moms in minivans. Us SUV moms are just kidding ourselves thinking the SUV is any cooler than the minivan. Really, it's just a whole lot less convenient! I'm thankful for my time with the Traverse because it really made me READY for the van world. Hello automatic doors! 

Even though I was ready for the van life, it was HARD to write that big check. We worked hard this year to save save save for this and it was sad to see that savings account drop down to practically empty. And it was especially hard to dish out that dough for a van when it's not something I was necessarily excited about. That is...until I drove it. I've heard from a LOT of people that once they drove the van they loved it. And it's true. I LOVE IT. I love how low to the ground it is. I love how much I can SEE. I love, LOVE the doors (although I legit could NOT get them open when I dropped Kye off at school. Like I had to read the manual and the teachers and I were cracking up). I love how huge the back up camera screen is. I love the sunshades on the back windows. I just straight up LOVE IT and am truly SO owning this whole Van Mom thing. I rock a van and I'm PROUD :)

More than being proud of my soccer mom status...I am much, much more proud of Zach and I and how truly we have committed ourselves to Dave's steps and to living life on a budget this past year. We already see SO MANY huge benefits in our daily lives and now have our first BIG item to show for our hard work. The next several steps (after we get the van paid off) aren't as "exciting" (I mean saving for 6 months of living expenses? Not exactly the most riveting thing ever haha) but they will provide a lot more peace of mind for us both and will get us closer to the BIG deal thing which is paying off the house and being totally financially free!!! We are both on a mission to get to that last step as quickly as we can so we are focused and driven on our goals and I'm excited to see what the future holds!!!

Happy One Year Dave-aversary to us! Excited to see how much more we grow (and save!) in year two!!! I HIGHLY recommend for everyone to read a copy of The Total Money Makeover . It doesn't matter WHAT your financial situation is...it's truly a life changing book!

1 comment:

  1. And just an FYI for any younger readers…there is also a high school/college version called Foundations in Personal Finance. I actually took a college course based around this book and it has changed my life! Highly, highly recommend it!

    ReplyDelete

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