One tip that Mr. Ramsey offers that I find especially interesting is that to know if you’re saving enough, you need to take the amount you have saved in your nest egg (savings/retirement) and multiply it by .08.

If you can live off the resulting figure, then you’re saving enough. If not, you’d better step it up (after paying off your debts of course).

I was surprised. I consider our savings rather paltry, but we actually *could* live off the results. Granted, we’d cut the cable and be living on rice and beans, but we would only have to cut our household expenses by another $300, which wouldn’t be hard.

What they say in the Total Money Makeover is true–the closer you get, the easier it becomes. We now are on the last of our “snowballs” (only one remaining debt to pay off), and it’s disappearing quickly because every extra resource can be dedicated there.

We haven’t followed one of the guidelines–we haven’t stopped saving. We’re still saving for retirement and for planned major expenses (one daughter’s adoption finalization, etc). If we’d stopped this, we could speed up the process even more.

If you’re just starting your Total Money Makeover, or considering starting the program, don’t loose heart. It goes so much faster than you’d expect. Good luck!

This is part 10 of a 30 part series on financial literacy for the month of April, Financial Literacy Month.

Motley Fool provides excellent communities and message boards, and some affordable financial literacy classes (at least they have, I’m not sure if they’re still available).

I learned about Mint.com from Motley Fool.

They also have excellent tax-planning resources!

The site is free with a free membership but there’s a premium membership as well. I’ve never explored this, as I’ve found everything I’ve needed in their free pages.

My only word of caution is “beware the ads.” Their advertising borders on oppressive. It also frequently has a doomsday or get-rich-quick tone that I tire of. There is email “why the oil boom is coming SOON” and the site is covered with ads. Sometimes it can be hard to tell the content from the ads.

They also have so many Fool-branded affiliate relationships that I can’t always tell what all they’re endorsing, or what is going to get me to sign up for some fund or stock newsletter. I find myself only reading the first 1/2 of all their pages and never the sidebars because of the advertisements.

That said, the message boards are excellent resources, as are their tip articles like “60 seconds to get out of debt.”

If you’re new to personal finance or trying to learn something new–check them out, but beware the ads–here there by dragons.

Seriously though, I got involved in my retirement planning, and household budgeting. We paid off our cars early and “burned the candle at both ends” to pay down our home mortgage (something we’re grateful now as most of our neighbors are upside down in their mortgages).

In my research of personal finance, I’ve studied the PF theories of two “gurus” of personal finance; Dave Ramsey and Suze Orman.

Dave Ramsey’s philosophy is a bit more stringent. He doesn’t believe in debt. He says never take more than a 15 year mortgage, and never, EVER use a credit card. I especially like his book “The Total Money Makeover,” which I downloaded as an ebook from Audible.com.

Suze Orman’s philosophy is a little more relaxed in that student loan debt is “acceptable” debt, and that a credit card used for job search expenses is OK. I found her philosophy and strategy very helpful in my first few years on my own. I especially like her book “Money For the Young, Fabulous and Broke!”

I find my own personal finance philosophy right in-between these two–shunning credit cards, but accepting mortgages and student loan debts. Mr. Ramsey encourages parents to pay for their children’s college, I’m of the opinion that they appreciate it more when they put themselves through.

I encourage you to check out the library or iTunes and their Web sites for some good ideas and information. Dave Ramsey has a daily podcast available for free from iTunes. I especially enjoy the Friday shows where he invites callers to call and scream “I’m Debt Free!” with him on the air when they’ve paid off their last debt.

Happy learning!

This is part 3 of 21 of “21 days of financial literacy” for April, which is Financial Literacy Month.

Here’s a brief list of what we’ve done so far, and where it’s getting us. Remember, my layoff was December 7th, and today is April 2nd.

• Called all lenders and negotiated lower interest rates. Followed up by shredding all credit cards. Value: Priceless!
• Learned to cost-cut around the house: home-made laundry detergent. Saves $7/mo.
• Budget and track all expenses with Mint.com.
• Renegotiated and repriced insurance, dropped the gap coverage on our paid-off/high-mileage cars. Saves $4/mo.
• Used the library more. Estimated savings $20/mo
• Developed passive income streams (adding advertising on this web site and others, as well as Lending Club interest). Earns $1.10/mo.
• Rolled-over my fee-intensive 401K into a more affordable IRA Savings TBD
• Found tax advantages to starting my mobile-notary and freelance writing business.
• “Re bundled” our cable-TV package to the same service and same company at a lower introductory price. Saves $25/mo.
• Received our tax refund and paid off an adoption loan ($150/mo, a credit card $100/mo and a student loan $110/mo). We have just one credit card left. Saves $360/mo in debt payments.
• Refinanced our 30-year fixed mortgage, and rolled in our home equity loan ($329/mo). We put both into a 15-year fixed mortgage and will be paying just $89 more than we were paying on our old mortgage payment. (We used Smarthippo.com to find a better rate). Saves $240 per month and 15 years off the life of our mortgage.
• Testing out some meat-free recipes for dinner. Last night the kids loved eggplant parmesan (they thought it was pizza!). Saves $24/mo.
• Renegotiated cell-phone plan (due to new business). Saves $100/mo.
• The layoff reduced our household’s commuting cost. Saves $200/mo in fuel.

  These tricks save us $981.10 per month, but we’ve noticed that now that all expenses are tracked, our household expenses have been reduced by about $1300 per month.

Here’s a few things that we’re not doing.

• Working more than 45-50 hours per week.
• Missing out on time with our kids.
• Cutting our daughter’s preschool (we may do this to ‘snowball’ an extra $660 per month, but she’s having so much fun, we’re having her stay for now).
• Clipping coupons.
• Stuffing envelopes or participating in “get rich quick schemes” and “pyramid sales.”

This is great news for folks like myself who are both self-employed and fans of P2P lending.

If you want to start an account for the 2008 tax year, you need to be enrolled and have funded your account by April 15th. The account goes by “real postal mail” not electronically, so hop to your research right away.

You can read more at the article I posted to Prosper Lending Review, where I’m a guest writer.