Its May! Dumping Debt with Dave Ramsey

[mtm]

Dumping Debt and Building Wealth with Dave Ramsey May 2009

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Welcome to May everyone! I still can't believe we're already in May. Here's to a great month!

These are the Baby Steps:

Pre-Step 1: Get current on your debts and do a budget
0.1 Commit to NEVER borrow $$$ again
0.2 Talk with spouse and get him/her on the same page as you concerning finances.
0.3 Do a written budget
0.4 Temporarily stop all retirement contributions
0.5 Get current on all the basics (Shelter, Food, Utilities, Basic clothing)
0.6 Amputate "toys" (bikes, boats, ATV's etc) if they will keep you from completing the snowball within 12 months
0.7 Cut lifestyle (Cut CATV, Cellphone, Regular phone "extra's", Internet, Eating out, etc) and/or take second job if $1000 EF will take more than 30-90 days.
0.8 Get current on ALL bills

BS1 $1,000 to start an Emergency Fund
1.1 Chop up/freeze CC's (You have an EF now)
1.2 Get Health insurance NOW if in the US (chances of getting sick w/ major medical bills are larger than that of death)
1.3 Get Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died.
1.4 Amputate cars that you can't pay off within 24 months
1.5 Consider raising insurance deductables to $500 or $1000

BS2 Pay off all debt using the Debt Snowball
2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest.
2.1 You can take your first vacation since finding Dave if you can pay cash for it (no using the EF !!!)

BS3 Three to six months of expenses in savings
3.1 Start car replacement fund
3.2 Save up 20% for home purchase OR pay down existing mortgage to the point you can drop PMI.
3.3 Start furniture or other non-essential stuff replacement fund

BS4 Invest 15 percent of household income for 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]

If you need added or removed from the list, or I got your details wrong just let me know and I'll fix it.

Pre-Step 1
dfunk98
Miasmamma

BS#1: Save up $1000
2lilsweetfoxes
Contrariety
crunchymomof2
dex_millie
Evenstar
fairydust020409
JamieB
JenniferH
JustKiya
KnittingKara
Krisis
Ksenia
lj2blessed
mamabain
mommaknowsbest
neveryoumindthere
Sihaya
stellarae
teenyToona
Tryingforbaby

BS#2: Pay off all Debt (except the mortgage)
100%Mom
AFwife
AllieFaye
astar326
beansmama
Bluegoat
ColoradoMama
Contrariety
excitedtobeamom
FeelingBlessed
goldfishkate
HappyMommy2
herwitsend
hollytheteacher
indie
jeliphish
jjawm
kavita
killick
LittleBirdy
lizziebits
llamalluv
major_mama11
mamimapster
MomtoWilmo
my2girlz
Nickarolaberry
okapi
onlygirls
onthemove
Pernillep
p1gg1e
PluggingAway
Rev1053
samandhenrysmom
thenaturefreak
tricia80
triscuitsmom
twin_mama
whiddle

BS#3: Build up to 3-6 months of savings
akichan
annethcz
Crunchy*VT*Mom
KailuaMamatoMaya
mammamo
maryjane
MCsMom
mtm
phatui5
sarafi
Sarah8Jane
Softmama
Stone_Fence
yasinsmama

BS#4
Denvergirlie

BS#6
kanga1622
rebeccalynn

[mtm]

today is payday for me so 600 more to the vacation fund means all the airfares are done. Next up rental car and spending money. I can't wait til I can't get back to funding the ffef again.

[beansmama]

:s::

I'm still here!

I planned my budget for May. We are using a big part of our "TMMO" money for baby stuff and car repairs this month, but we'll get to knock our debt down a couple hundred dollars as well...better than nothing!!

I'm also expecting a credit from T-Mobile - they overcharged us more than $70 when we closed our account, as well as about $200 from taxes...so that'll all go towards knocking out debt too!

I can't wait to be on BS3, hehe! I'm hoping we can get all this debt behind us before the baby comes

[tricia80]

Hi Ladies,

I read financial peace and still waiting on TMMO from the library.. its amazing how many of these types of books are checked out right now...

I have a budget now.. and working on things...

Right now i am in BS1 with 50/1000 in the savings account. I wish I could put more but unfortunately I have a consolidation loan which is $570/month. So I am sorta in BS1 and 2 at the same time..

[Bluegoat]

Hi guys, I'm new to this thread. Dh and I just got $1500 back from our taxes, so we are using it for our emergency fund and are starting the debt snowball with dh's cc.

[jeliphish]

BS1 Done
BS2 working on a few odds and ends bills (about $600 worth)

Overall on hold though because we just had a baby girl 10 days ago and need to stockpile some cash so that I can stay off 3 months with her

[mtm]

beansmama, knocking down the debt is good. Great job on getting all the baby stuff and car repairs in without using credit! What a relief it will be to have the debt gone by the time the baby comes.

tricia80, 50 is a good start to the ef. Nice to have you on the thread. Let us know if there's anything we can help you with.

Welcome also to Bluegoat and dfunk, good to have you with us.

jeliphish, congrats on the new baby girl, you are amazing, new baby and still working the steps! :

[beansmama]

Originally Posted by jeliphish

BS1 Done
BS2 working on a few odds and ends bills (about $600 worth)

Overall on hold though because we just had a baby girl 10 days ago and need to stockpile some cash so that I can stay off 3 months with her

Congrats on the baby:

[tryingforbaby]

PLEASE MOVE ME TO BS1!!!!

Today I just set up a payment plan with the creditor of Citi bank. Now all bills are current. We are working on BS1 and saving for a moving fund so that when hubby joins the Army in fall we are prepared for the cost ofmoving.

[LilyGrace]

We're still plodding along at BS2. Dh is going to Italy this month to play softball (I'm envious!) so all the money I wanted to put toward the cc isn't going to happen. BUT, I just sent a payment off, and if I calculated right that means we've paid off 20% since January when it was at its peak. I'm counting down the months it will take us to pay off the remaining - at last guesstimate we have 11 more. I can't wait!

[Maluhia]

I'm finished with BS1 (put me on the list!) and by the end of this month we'll be done with BS2 and moving onto BS3... :::

[ColoradoMama]

I'd like to join this thread. We're sort of doing this. I say sort of because we're doing BS2 and 3 a bit at the same time. Dh is working contract, so we really need to have some living expenses in the bank since his work is not guaranteed. I mean, it is probably guaranteed through November at least, but I'm not good with "probably." It's kind of a weird place to be though because when I look at our finances, I know we could pay off our van THIS month with the money we have in savings. But, I'm so not comfortable dipping into the "living expenses" money - especially in this economy. So, I guess I have to be okay with next month. Anyway, I think we can be debt free by the end of the year even with putting "living expenses" money away.

[Sarah8Jane]

First of the month update:

BS3 $7577/$9000
BS4 Done
BS5 N/A
BS6 Not yet
BS7 Not yet

I got back from a business trip last night. I tried doing cash. It really didn't work out; I splurged on things I shouldn't have. Next time I'll stay strictly with my debit card.

[beansmama]

I'm getting ahead of myself - i'm already planning for my FFEF

I was hoping to get some opinions. For a 6 month fund we'd need $7922. This just covers bills and necessities (we'd cancel netflix and forgo the $50/mo entertainment money, lol).

I don't like that number. Clearly...i could round up to $8k, but for some reason, i'm really liking the idea of having $10,000 in an emergency fund. It seems like a good number. Am i just being ridiculous? I'm sure DH would be okay with that amount, but do you think it's worth it?

FWIW right after our FFEF is finished, we are starting step 3b -saving for a house...that'll take us hmmm...5 years? So really, I suppose we could just save the $8,000 then if disaster strikes break into our house saving fund?

Just looking for some feedback - tia

[Miasmamma]

We just started the FPU classes at church, so we are still trying to get current and find money to put towards our EF.

[Pernillep]

Working on BS2

This month most of what would have been snowballed to pay off the car went to a car repair bill and a bed upgrade for DS. Felt pretty good not to have to put the repair or the bed on a credit card. Credit card balances are still $0

Hopefully, I can squeeze a little extra out of the budget this month and make up for some of the cost of the bed etc in next months snowball.

[samandhenrysmom]

Please put me on BS#2
We just started our debt snowball last week!

BS#1 Done
BS#2 Total Debt: $41,195 started 4/24/09 paid $1912

[major_mama11]

BS1 $1,000 to start an Emergency Fund- DONE

BS2 Pay off all debt using the Debt Snowball-
0/ $13,780 car loan

BS3 Three months of expenses in savings- $4000/$7000 (57%)
(pausing this step in order to pay off car loan)

After my maternity leave this summer, I am planning to put an extra $200 per month on the car loan, in addition to the $249 minimum payment that DH is paying on it each month. When I go back to work in July, I will increase that monthly amount as much as possible. I hate being back in debt, but at least I won’t have to bum rides to work all winter like I did last year! Hopefully we can pay it down quickly.

Went to an online snowball calculator just now, and calculated that it will take 34 months to pay off this loan if we pay $450 per month on it. I’m printing out the payment calendar and tacking it to my wall, just like I did when we were paying on our credit cards and student loans! Hopefully we can pay way over on it whenever possible.

Also, yay for frugality rubbing off on skeptical spouses! DH was hinting that he wanted me to buy him a $200 grill for Father's Day, but this morning he decided that instead, he is going to make do with fixing his dad's old one. Also, I went to Aldi's last week, and he has been raving about how much decent-tasting food we got for much less than what we normally spend. He said we should get all our food there from now on- I never thought my brand-name-everything man would say that! This new attitude should help our budget immensely!

[mammamo]

You can add me! We just started BS3, but haven't realllllllly started it. We just paid off the last of the debt and are waiting to redo the budget until after I go back to work from Maternity leave. We are so happy to have done this.

We always shop at Aldis and there's only a few things that I won't buy there because they taste bad. Everything else we love and I take food to potlucks, etc, and nobody ever says anything about "bad" tasting food: