or Connect
Mothering › Mothering Forums › Natural Living › The Mindful Home › Frugality & Finances › Getting Out of Debt with DR, Sept 2009
New Posts  All Forums:Forum Nav:

Getting Out of Debt with DR, Sept 2009

post #1 of 131
Thread Starter 
Woohoo, its September! Who is in for a month of getting out of debt and getting into financial shape? Most of us use Dave Ramsey's method but please join us even if you're following someone else/your own plan. All welcome!

Here's DR's plan:

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!
post #2 of 131
Thread Starter 
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
anstar
BelovedK
BonnieNova
dfunk98
eirual
ktg
madsommer
Miasmamma

BS#1: Save up $1000
2lilsweetfoxes
Contrariety
crunchymomof2
dex_millie
Evenstar
fairydust020409
JamieB
JenniferH
JustKiya
Kaitnbugsmom
KnittingKara
Krisis
Ksenia
Leav97
lj2blessed
mamabain
MamaPam
mommaknowsbest
neveryoumindthere
Sihaya
teenyToona
Tryingforbaby

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

BS#3: Build up to 3-6 months of savings
akichan
annethcz
beansmama
Crunchy*VT*Mom
Denvergirlie
KailuaMamatoMaya
mammamo
maryjane
MCsMom
mtm
Nora_SEA
phatui5
phillytwinmama
Rev1053
sarafi
Stone_Fence
yasinsmama

BS#4
Softmama

BS#5

BS#6
kanga1622
rebeccalynn
Sarah8Jane
post #3 of 131
Yea for September!
DH and I just moved to BS3! :
We paid the last payment to the SL yesterday!
Its going to feel so good to be just transferring money to our savings account rather then be making a payment to someone else. I am so excited to actually get to keep our money now.

:::::::

Thank you to Dave Ramsey.
post #4 of 131
Congratulations Rev!
post #5 of 131
Great job, rev!

I'm now at BS2. :

Need to pay off the car loan and the remaining cc. I was throwing extra at both but probably for the end of the year I'll just have to do the minimum. We're paying off this year's new medical bills, I'll be paying for my dad's plane ticket to spend Thanksgiving with us and we'll probably need to take kitty in soon to have a small lump looked at. Then of course there's the holidays with 5 stepkids and 2 grandkids.
post #6 of 131
Thread Starter 
Rev and sweetjasmine, what a great way to start the month ::
post #7 of 131
We moved from BS 1 to BS 2! Yay! For August we saved up the $1k emergency fund, plus we also needed a $200 "buffer" fund for non-emergencies for things like paying our CSA share for the month (we "pay ourselves back" each month by reducing our grocery spending, but were not able to pay it upfront without starving ourselves, lol). So we have both now, and also have $92 left over to start the snowball for our first debt (car payment).
post #8 of 131
We are still on BS2. We started using envelopes today and I found 4 IRL friends who are doing DR. One recommended a financial planner here in town who is an ELP so I called him today. We missed each other so I will try to call him back in the morning.
post #9 of 131
We're still plugging away at BS1 (though we've only been there for 2 wks now, so I can hardly complain) and the end is near with a gov't grant on its way to us to help us finish it off, hooray! By the end of this month, we will hopefully have enough saved (in addition to the emergency fund) to pay cash for new shocks for the car and start our snowball a rollin'.

We've changed in quite a few ways over the last few weeks: we're not treating ourselves when extra money comes in- we're putting it to work, we're not buying things we don't absolutely need (though I did just go and buy clothes for work, but they were pretty much needed and since I haven't started working yet I stole $ from our gas budget which is over-funded this month. I got 4 outfits that I love for $50 vs a bunch of stuff I kinda liked but would never wear for $200, so I'm happy. I've also realized that if it doesn't fit now, it won't fit later. If it doesn't hang well now, it won't hang well later. If I don't love it now I won't love it later, and if I don't love it, I'm not going to wear it, so don't buy something I'm settling on or otherwise hoping it will work somehow. Those are the things that live in your closet with the tags on and just make you feel frumpy. For clothing which I rarely buy I also shifted from thinking "if I don't like it, I'll return it" to "if I get home and still feel I'll need it, I can come back for it.")

I'm amazed at how much money just drifted away before. It feels so good to be in control and to have a plan
post #10 of 131
Still working on BS2. This was our SECOND month in a row of staying within our budget....a huge accomplishment for us.

We have a large water bill due this month so we don't have much extra to throw at debt, but if we can stay within budget for the third month in a row, I will consider it a success!
post #11 of 131
Congratulations Rev! I can't wait for that day. YOU'RE DEBT FREEEEEEE!!!!

sweetjasmine and laohaire, great job moving on to BS2!!

We're still plugging along in BS2. Paid off another (the 3rd) credit card in August. $2,775 down, $43,300 to go!
post #12 of 131
Someone please tell me it's not a good idea to borrow money to stay in a nice hotel for our anniversary this week. I know it isn't but...I hate to cancel the reservation. We are way behind on things this month (yes, I know it's the first!) and I am worried. Still on our way to BS1.
post #13 of 131

Can I join in??

Hi all

i guess I am pre BS1, DH and I are drowning in debt, we recently came in contact with the DR materials, and think it is a really sensible program. I really want to get things in order bc it is really causing tension between DH and I I am not even sure what I owe. DH went through a foreclosure before we were married and is trying to get things in order, like me, he isn't even sure how much of a mess he is in.

I could go on about the mess we are in, but I won't right now. We are ready to pull out of it, but I am afraid that I don't have the willpower to stick with the plan. I love to shop, and we eat out. I HAVE been cooking at home though most nights lately since we decided to get a hold of this financial thing. The only thing I mainly struggle with is our 'date night', it is really important to us. I think it keeps our relationship fresh. Lately we have been doing things like riding bikes together, walking and talking, but DH and I really like to share a meal out (once a week) and I know that is a no no

Anyway, I just wanted to introduce myself and get started with this thing.

Anyone have any good ideas for out date night that are fun and don't cost $$ like movies and eating out?
post #14 of 131
we're on to BS2. i just had surgery which added $3500 (deductible) to our debt, really we are just suspending snowball and cashflowing, which feels great. NO NEW DEBT!

but it is putting us back in our goals.

we have student loans to pay off. we're 20% done with debt.

post #15 of 131
We are on baby step #2. Here is our remaining (yay!) debt: Dentist: $1500, CC #1: 5,500, CC#2: 7500, Boat: 9,000, student loans 23,000.

Our struggle is we've opened up so much extra income (we could have 1500 a month easily going towards debt) that we are wanting to enjoy this extra money and do things with the kids. We have two foster kids, 8 and 12, and a 3.5 year old. It's really hard for us to stay so tight and on track. We were really struggling for a long time making ends meet, and now that we have flexibility, we aren't building debt, but we're moving really slowly. We need to get our motivation back! Also, we need 1300 for a transmission, 450 for the rest of our pellets.
post #16 of 131
hi folks, I'm new to this board but not to DR. currently we're on BS3 and I look fowarding to joining your group.
post #17 of 131
Quote:
Originally Posted by BelovedK View Post

Anyone have any good ideas for out date night that are fun and don't cost $$ like movies and eating out?
A picnic in the park or by a river? Check for cupons for bowling or a cheap $2 theatre? A bedroom retreat for backrubs with some atmosphere? A bath with some wine (or nothing but bubbles)?

I tend to think that a 'date' is more a mindset than an event per se.
post #18 of 131
Quote:
Originally Posted by eirual View Post
.....we're not treating ourselves when extra money comes in-.......I'm amazed at how much money just drifted away before. It feels so good to be in control and to have a plan
I totally agree, its great to have a plan! All that "extra" money makes a big difference towards debt.

Quote:
Originally Posted by The Hidden Life View Post
Someone please tell me it's not a good idea to borrow money to stay in a nice hotel for our anniversary this week. I know it isn't but...I hate to cancel the reservation. We are way behind on things this month (yes, I know it's the first!) and I am worried. Still on our way to BS1.
Its not a good idea! I wouldn't borrow money for a vacation. Cancel the reservation. Sorry.

Quote:
Originally Posted by BelovedK View Post
I love to shop, and we eat out. I HAVE been cooking at home though most nights lately since we decided to get a hold of this financial thing. ......cut...... but DH and I really like to share a meal out (once a week) and I know that is a no no
Welcome! And everyone loves to buy new things and eat out... DR isn't against enjoying yourself as long as you can afford it. If you cant pay cash for it you shouldn't be buying it.

Quote:
Originally Posted by tynme View Post
Our struggle is we've opened up so much extra income (we could have 1500 a month easily going towards debt) that we are wanting to enjoy this extra money and do things with the kids. .......... We were really struggling for a long time making ends meet, and now that we have flexibility, we aren't building debt, but we're moving really slowly. We need to get our motivation back!
Its hard to keep the motivation, but imagine how quickly you could be out of debt if your making $1,500 payments every month!
And congratulations on not building more debt!
post #19 of 131
Quote:
Originally Posted by tynme View Post
We are on baby step #2. Here is our remaining (yay!) debt: Dentist: $1500, CC #1: 5,500, CC#2: 7500, Boat: 9,000, student loans 23,000.

Our struggle is we've opened up so much extra income (we could have 1500 a month easily going towards debt) that we are wanting to enjoy this extra money and do things with the kids. We have two foster kids, 8 and 12, and a 3.5 year old. It's really hard for us to stay so tight and on track. We were really struggling for a long time making ends meet, and now that we have flexibility, we aren't building debt, but we're moving really slowly. We need to get our motivation back! Also, we need 1300 for a transmission, 450 for the rest of our pellets.
Can you set a new goal to get motivated? Like $45,500 would get paid off with 31 instalments of $1,500 or in 2.6 yrs. What about aiming for being out of debt with a $7,000 vacation fund in 2 years (because you'll be snowballing, sooner if you can) to get some fire under your toosh again!
post #20 of 131
Quote:
Originally Posted by phillytwinmama View Post
hi folks, I'm new to this board but not to DR. currently we're on BS3 and I look fowarding to joining your group.
I recognize your name from WDF board! Welcome.
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: Frugality & Finances
Mothering › Mothering Forums › Natural Living › The Mindful Home › Frugality & Finances › Getting Out of Debt with DR, Sept 2009