wbmsic reach out and touch someone
Wondering what to do next has been driving me nuts for a while now. I absolutely need to have a driving goal in order to be gazelle intense about saving money. I need something to motivate and inspire me. I’ve been following Dave Ramsey’s plan for a while now, but at this point, I’m beginning to question where to go next, as there’s a bit of leeway in his plans too.
Baby Step 1: Save 500/1000$ as a Baby Emergency Fund
Okay this I wavered on, saved 500$ (for households below 20K, as he says), spent it, saved up to 1000$, spent it, saved 500$, then pushed it to 1000$ and it stuck.
Baby Step 2: Pay off all debts, using the debt snowball
Check: Oct 2008
Baby Step 3: Save 3-6 months Emergency Fund
Getting there / am there / wondering how much is enough.
I translated this into my own goal: Save 5000$ in my TFSA as a Security Fund by the end of 2009. 5K is the limit of the TFSA and according to my initial calculations 4 months of expenses. After writing a more “emergency living” budget, it’s actually closer to 6 months. Currently at 65% of the target goal and chugging along nicely to be able to reach it, possibly even a month early, we’ll see how that works out (don’t count chickens before they hatch Jess)
Here’s where it gets confusing:
Baby Step 3B: Save for a downpayment / cash purchase of a house
Baby Step 4: Save 15% gross income for retirement
Baby Step 5: Save for College (in this case for ME, not my kids)
Jess’ Wish 6: Serious travelling.
Jess’ Goal 7: Spent money upgrading my apt’s look (see also Having a saucy apt
What I think makes this especially confusing for me is that RRSPs can be used for three things: Retirement (BS 4), school (BS 5) and downpayments (BS 3b). Some people say I should just save the money and decide later what I should use it on. That approach doesn’t really work for me, like I just mentioned.
I DO know that I will be letting myself have a really nice treat as a mega reward for completeting these Baby Steps. Dave says, you’ve been promising a kid ice cream if he will behave, now you deserve the ice cream :)
