Dumping Debt and Building Wealth with Dave Ramsey February

[mtm]

Welcome everyone! Let's see what we can accomplish this month.

These are the Baby Steps:

BS1 $1,000 to start an Emergency Fund
BS2 Pay off all debt using the Debt Snowball
BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement
BS5 College funding for children
BS6 Pay off home early
BS7 Build wealth and give! Invest in mutual funds and real estate

Here's the link to Dave Ramsey's website:

www.daveramsey.com

Please join in!

[mtm]

I love the lists of who was on what step so went back to an older thread and found one. If you need added or removed from the list, or I got your details wrong just let me know and I'll fix it.

BS#1: Save up $1000
2lilsweetfoxes
AllieFaye
Contrariety
crunchymomof2
dex_millie
Evenstar
fairydust020409
hollytheteacher
JamieB
JenniferH
JustKiya
KnittingKara
Krisis
Ksenia
mamabain
mommaknowsbest
neveryoumindthere
onthemove
p1gg1e
Sihaya

BS#2: Pay off all Debt (except the mortgage)
AFwife
annethcz
astar326
Contrariety
excitedtobeamom
FeelingBlessed
HappyMommy2
herwitsend
indie
kavita
killick
LittleBirdy
llamalluv
mamimapster
my2girlz
Nickarolaberry
okapi
Rev1053
thenaturefreak
triscuitsmom
whiddle

BS#3: Build up to 3-6 months of savings
Crunchy*VT*Mom
Denvergirlie
major_mama11
maryjane
MCsMom
mtm
phatui5
sarafi
Sarah8Jane
Softmama
Stone_Fence

BS#6
kanga1622

[mtm]

As you can tell by my multi-posting, I'm excited about this month. I finally finished bs2 in January so this is my first month in bs3. I just sent off my first payment to my ffef :

[HappyMommy2]

Ok - I'm in! But since I am in the emergency situation, not sure if I should be spending on the snowball, or just paying minimums until one of us finds a new job. (Both laid off in Dec)

I just hate to stop my auto-payments on my cc!! But I am also nervous about this economy and don't want to regret my decision a few months down the road.

BS1 $1,000 Emergency Fund - DONE!! (credit union)

BS2.1 - $5k credit card (auto-pay $400/wk from savings)
BS2.2 - $5k car (320/mo)
BS2.3 - $1800 credit card (0% interest until 2011, I have to pay at least $35/mo, but I pay $60/mo so it will be paid off before the offer expires)

BS3 - Three to six months of expenses in savings
two months in savings, being used up now.

BS4 - Roth IRAs.
Have a 401k, but it isn't getting any donations in 2009! (yet)
Need to set up a Roth for DH

BS5 - College funds.
DS started, DD to be started.

BS6 - Pay off home early.
I pay an extra $120 each month. I wonder if I should stop doing that and focus on the credit cards?

BS7 Build wealth and give!
Someday...

Ok - After reading this post, I think I am spending like I am still employed. I think I am in Denial!!!!! Big time! I better rethink the outgoing money. Advice and experience welcomed and appreciated!!

[excitedtobeamom]

HappyMommy2-Dave Ramsey would say stop paying anything extra but the minimums and save every pay for your big storm cloud. Once you get jobs then any extra you have goes to debt but not until then. He would also recommend getting jobs immediately even if it isn't ideal while looking for a new job. Make sure you cut back on everything cable, eating out, books, clothes-anything that isn't a neccesity. Good luck!

[my2girlz]

I'm jumping back on the wagon. I'm excited about this month. Taxes will be done and should have arrived by the end of the month and another chunk will have been taken out of my mountain. I'm currently on BS2 and almost 50% done.

Here we go!

BS2 $33499.82/$60000

[Crunchy*VT*Mom]

I'm in as usual.

I've moved from the BS2 on your old list though...I'm now on BS3. (yahoo!)

BS1: Done!
BS2: Done! (it took us three years)
BS3: Three months in savings $2,500/$9,000

[annethcz]

I'm in again. I wasn't on your list above, but we're on BS2. We don't completely follow all of DR's advice since we are also contributing to DH's 401(k) and 529s for our kids. But the support on this thread is helpful, so I follow along anyway

BS1: done.
BS2: balance on Feb. 1- $6609

I sent $1100 to the credit card this weekend, that should be credited to the account on Monday.

I've filed our taxes and our refund should be direct deposited no later than Feb. 10th. We'll need to save about $700 of the refund to pay our state income taxes, since we didn't have enough deducted from DH's paycheck last year. The remainder of the refund (about $4200) will be put towards the credit card.

With any luck, I should have another $100-200 to put towards the credit card at the end of the month (excess from monthly budget). So that means that we will have the card completely paid off by the beginning of March. It'll be a stretch to get it all paid off, but I'm feeling highly motivated to make that happen.

[phathui5]

We're still here, stagnant. Last August, just after completing BS3, dh was laid off. Thank God for TMM, because we wouldn't have hung onto that money otherwise. Here, six months into dh's unemployment, we have $15,500 left in our emergency fund. Between my income from doing childcare and dh's unemployment, we've only had to transfer between $1000 and $1500 a month into checking.

Dh is still looking for a job and I'm taking on more childcare kids.

[Okapi]

I'm in! We are on BS1 (don't have the exact #s because I'm not at home right now), but we are about 1/2 way done w/ that, and I think we will be able to finish it this month!

[indie]

I did my taxes a couple nights ago and we are getting enough to pay off our three lowest debts and will be able to snowball approx. $250 a month into the next debt. I'm very excited about the big boost this is giving us.


Also, I asked this at the end of the last thread but it went unanswered. Does anyone have advice on where paying down your mortgage enough to stop paying PMI should go? I'm thinking maybe after bs3.

[MCsMom]

Originally Posted by indie

Also, I asked this at the end of the last thread but it went unanswered. Does anyone have advice on where paying down your mortgage enough to stop paying PMI should go? I'm thinking maybe after bs3.

That is where I am putting it, in kind of a 3.2 kind of position. We have two mortgages (two residences) and one already had more then 20% down, so it is just the second one that is there. So for us, our baby step three looks like this:

BS 3.0 - 6 months padded income
BS 3.1 - post deployment vacation fund
BS 3.2 - 8% more on mortgage
BS 3.3 - play structure for the kids

And then BS 4 - but just for the record, even though we are in BS 3.0 (75% completed or so I have not crunched the numbers this pay period yet) both of our kids do have a college fund started, and we contribute to a Roth IRA already, just not 15%.

[Rev1053]

I am on step BS2.

CC: $3,375.47

I am really hoping that once we get the time to file taxes we don't have to pay in this year. Hopefully we can make a larger dent in that CC!

I am just so proud that the past few months we haven't ADDED to that darn card.

[Denvergirlie]

Originally Posted by indie

Also, I asked this at the end of the last thread but it went unanswered. Does anyone have advice on where paying down your mortgage enough to stop paying PMI should go? I'm thinking maybe after bs3.

Correct, BS3.5

Get your BS3 in place, then attack the mortage to drop PMI, then start BS4.

Thoughts - If you are close to retirement, you can start that BS4 in some fashion. However, if you can knock out that PMI in 2-3 years make that your focus then when that's done start BS4, retirement savings.

[Denvergirlie]

Well still stuck in the middle of BS3, have about 3.5 months, but am shooting for 6-9 months.

Looking forward to my Feb 15th paycheck, this is my FFEF payment, and haven't added to this fund in more than a month due to some truck repairs that I finally addressed that have been needing to be done for the past year plus.

[llamalluv]

February 1st Debt Numbers:
CC ................1,250.00
Student Ln 1....2,683.86
Student Ln 2...6,531.20
Auto Loan.......7,499.75
---------------------------------
Balance.......$17,964.81

Goal: $2,000

[herwitsend]

We're still here (not on the list, though). Working on BS#2. I'll have numbers closer to the end of the month (DH gets paid once a month around the 20th). Looking forward to DH's bonus and a little bit of tax return this month!

[kanga1622]

Wow, I completed our taxes this weekend and we owe about 1/5 of what we thought! That means a much larger snowball on the mortgage this month!

I can be moved from BS3 to BS6. We've got about 6-7 months budget in savings currently and are adding to it each month (for sinking funds).

Got my new washer delivered last week and it's a little bigger than our old machine. I'm thinking it will save me 1-2 loads a week! Also spent $7 this weekend for a new float kit for one of our toilets. Now it doesn't run for no reason and I was able to set it to the minimum water level for a full flush. I'm hoping between these two things that our next water bill is a bit smaller. :

[Contrariety]

BS1: $0/$1000 Emergency Fund
BS2.1: 0/1400 Short-term Tuition Loan
BS2.2: 0/3800 CC :

These are the steps I'm working on this month. I should have my tax return by next week, which will take care of the 1st two, and hopefully 800-1000 of the 3rd. That's something! We were supposed to have the CC paid off in full with the return, but I'm (slowly) getting over it. Crap happens.

We've had a rough financial road the past few months with many unexpected expenses popping up. I'm hoping for a few months of smooth sailing. The tax return is saving my sanity right now!

[mamimapster]

We're in: We are on Bs #2 and hoping to be almost done with the adoption payment this month, as well as attacking CC #2-we paid of CC #1 two months ago, and CC #2 is now below 2,000.

BS #1-Done
Adoption 1500/2100-600 to go Woo hooo!
CC #1 Done
CC #2 1800/2400
Cc #3 4000
Cc #4 7600
Student loan #1 2900
Student loan #2 35,000: