Hi, welcome to the Carnival of Debt Reduction: Here we go!

How To Clean Up Your Credit Rating!

The Seven Roads To Financial Ruin!

How To Choose A Zero Percent Card!

Don’t Rely On Home Equity For Cash!

Bad Credit Hurts!

Credit Counseling - Non-Profit Isn’t Free!

Can I Afford This Property?!?

How To Lend Money To A Friend!

$12,000.00 Down!

That’s all folks! Today’s Carnival is brought to you by the awesome exclamation point!

(Sorry about the limited format. I am without my own computer, away from home, and at my in-laws! In other words, I have like 3 minutes to get this thing up and posted.)

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I’ve wanted to do this for a long time. Here is a list of the important posts along my journey towards debt freedom. Hopefully reading these posts you will be inspired to get out of debt in 2007! (Start at the top of this list and go down to follow my journey in chronological order.)

April 2005

My First Post
My First Debt Summary
My First Set of Goals
My First Set-Back

May 2005

My First Update
Updated Progress
More Updated Progess

June 2005

Using Our Emergency Fund

July 2005

Automobile Debt Milestone
Realizing The $100 a Day Truth
Why I Do This
My Son Gets Sick
I Turn To eBay
Another Update

August 2005

First Automobile Paid Off
Second Automobile Paid Off

September 2005

Another Update
I Hosted The Second Carnival Of Debt Reduction
Update (Sitting At $3900)

October 2005

Seventy Percent Of Debt Gone
Problems With Credit Card Transfer

November 2005

$2990 Left
$2660 Left
My Favorite Free Things

December 2005

85% Paid Off
$1000 Left!
I Get a Raise
7% Left

January 2006

I Start My Podcast
A Upromise “Secret”

February 2006

I Am Debt Free!

It’s strange to go back and read this post. I noticed a few things. First, My updates were somewhat sporadic. Second, I used to get more comments. Third, this has been a pretty awesome ride.

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I like to give Amazon’s gift certificates for 5 reasons:

They are easy to purchase.

They are easy to send. (Via email!)

Amazon always has good deals. These make it easy to take advantage of those deals w/ out credit card funding.

Ever buy the wrong size or color? Me, too.

They are perfect last minute gifts and they make it easy to stay within my per-person budget.

If you’d like to purchase an Amazon gift certificate, please do so via this link.

Amazon Gift Certificates

All proceeds go towards keeping the various NCN sites up and running.

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I will be hosting the Carnival of Debt Reduction. Articles will be published TUESDAY, DECEMBER 26! If you have an article, please submit it via this link. Articles should be focused on debt reduction. You can include a post on “how to, why, how much, your progress, your goals, etc.”. As long as the post is related to getting out of debt, I’ll put it in the Carnival. So, hurry, hurry, hurry, while supplies last, and sign-up today!

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If you read my last post, you will see a comment from Living Almost Large. This post was inspired by LAL’s comment…

Emergency Fund: The Breakdown:

How Much? $20,000 (16K w/ ING, 2K w/ Tradeking, 2K w/ Primary Checking)

Why $20,000? Our monthly (necessity) spending = $3000.. 3K x 6 months = 18K. So, I wanted at least 18K to cover the cost of living should I lose my job. I bumped it up to 20K for a bit of added security. (The 2K in my checking account fluctuates a bit, and I wanted the 18K to be more “stable”.)

What is is for? Primarily, this money is here for a major life event, such as a job loss or a death in the family. Secondarily, this money is here for a minor life event, like a blown tire or a broken air conditioner. If you BUDGET for those secondary level emergencies (by setting aside a portion of each paycheck to pay for nonrecurring events), then you will not use your emergency fund for such purposes. If you do not budget for those secondary level emergencies, then you will have to use your emergency fund for such purchases. How do I handle it? I usually do a little bit of both. For instance, I purchased a set of new tires for my wife’s van last month. Prior to the beginning of the month, I budgeted the tire amount into our regular monthly budget. So, I did not have to use any money from savings to pay for the tires. However, if I had not budgeted for the tires, and one of them had gone flat, I might have had to dip into my emergency savings, depending on how much discretionary money I had left in my monthly budget. Long term, you want to get to a point where you are budgeting (setting aside allocated funds) for almost every conceivable event, even some of the primary emergency types. Right now, I keep my budget pretty simple, and I put every dollar that I do not spend into a savings account, creating a ’slush’ fund for various unforeseen expenses.

Two kinds of emergency funds: Basically, I have had two kinds of emergency funds in my life. First, I had my baby emergency fund of about 1000 dollars. I had this emergency fund set aside while I was getting out of debt. It’s purpose was to get me out of a jam when / if something unexpected came along. In other words, it’s purpose was to keep me from borrowing money! Now, I have a different kind of emergency fund. It’s purpose is to provide a cash cushion should anything happen to me or my family. It’s there to offer peace-of-mind. I can use a small portion of it, if I don’t have money on hand, to meet small “emergency type” needs. Or, I can totally leave it alone, “forget” about it, and know that it will always be there as my safety net.

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Five days before Christmas, our clothes dryer died. I had a friend (who is an electrician) come look at it, and the motor is kaput. It would cost as much to fix the dryer as it would to replace it. But, this article is not about the dryer. This post is about peace. You see, I have an emergency fund: 3 to 6 months worth of expenses, stashed away in my ING Direct Savings Account. So, I don’t have to worry about where I’ll get the money to replace my dryer. Now, if this had happened two years ago, 5 days before Christmas, I would have freaked out. Now? I just go buy a new or used dryer, and I go on with my life. I don’t have to whip out my credit card, I don’t have to worry where the money will come from. I just handle the problem. When you have an emergency fund and actual cash savings, emergencies cease to be “emergencies” and they become “hassles” and “inconveniences”. (By the way, my sister just called and she has a dryer that is in storage, so I’ll be using it until we find the dryer we want. Yay!) Lesson: You need some cash savings so that you can deal with the “issues” of life! Think about it: If YOUR dryer stopped working, right now, would you have to borrow money to replace it? Hmmm… (Side note: I have 6 more referrals for ING Direct. You deposit 250, you get 25 dollars, I get 10. Click the contact button in the left-hand column and I’ll email you a referral code.)

(Not My Dryer!)

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