Non DR Financial Plans

[dealic]

Hello!

I know a lot of people seem to be following the Dave Ramsey school of financial planning, and that's good and all. But I am wondering if anyone can point me at any other (online preferably) financial planning programs. My husband and I are working on our plan and I would like a few varied theories about what to do so we can have a well balanced background before we get set in one method.

Thank you!

[ambersrose]

Me and my husband just started following "America's Cheapest Family" plan. We checked their book out of the library. They have a website too http://www.americascheapestfamily.com/ . The DR plan is to extreme for us.

[dealic]

Thank you! *off to look into that site*

[chaoticzenmom]

http://www.vertex42.com/Calculators/...alculator.html

I love this spreadsheet for helping to plan how to best pay things off.

[dealic]

Thanks! I downloaded it!

ETA: I like that one. It really let me play around with it and SEE what I know I am trying to do with my own real numbers. Plus I like how I can pick what method to snowball by, as in this we will differ from Dave. We have to get rid of the highest payment one first (my car loan, 500 a month) because when my DH starts school in September, it puts us too close to the edge of not making it if anything comes up. Luckily, it will be gone as soon as I get my tax refund.

[RunningMomTegan]

I think it also depends on how much you're talking about... Most people give similar advice to the DR debt snowball concept. My husband and I had a small amount of student loan that needed to be paid off before I stop working in August. But it was only at 2% interest, so we didn't go crazy. I just paid off the last $3,000 with our tax refund. $500 extra a month, yay!

But if I had $40,000 in CC debt, going crazy on it might be the only thing I need!!!

I have benefitted greatly from reading some Suze Orman's stuff... She can be annoying, but her general philosophy is to take care of your money and your things and your life as a reflection of self-appreciation and esteem. "I worked hard for this money, so I will manage it wisely. I worked hard to own a home, so I will maintain it well", etc, etc.

I put together my own budget worksheet. I looked at some pre-made ones, but going through the process of looking at what I was spending and creating it was extremely helpful. I googled, and there are a ton out there. You Need a Budget (YNAB) was very highly rated, but I was overwhelmed by it, so I made my own

[dealic]

I am planning on making our own budget because it strikes me as easier than modifying an existing one.

I think I am mostly wondering what other people suggest you do WHILE snowballing debt. About tips for being financially secure now, while we still have it. He recommends $1000 BEF, stopping my RRSP (retirement) contributions, etc. Well I am NOT stopping that, and I wonder if the BEF is a good idea or if the money is better put on a credit card because of the interest, but in any case I am working on some debt before I get to that because it makes the most sense. So what do other people reccomend about what ELSE you do while paying down debt.

I watch Till Debt Do Us Part regularly, and she recommends using jars to budget weekly allotments, I think she has them start saving while paying down debts, she often talks about consolidations, usually wants someone to bring in more money, etc.

I don't know really what I am looking for. I am just stressed because I want to make sure we aren't in over our heads, when we very well may be.

[eirual]

I don't know where you're coming from, so this may not be advice you want/need, but have you really looked into Dave Ramsey? I think so many people recomend him because his theories really work.

If you can, pick up Total Money Makeover from your library. That can be the start of your research (or at least a part of it since it sounds like you've been doing much already). His ideas don't make sense without the background which is well explained in that book.

I had to fight with DH to establish an emergency fund BEFORE paying off the CCs- of course it makes the most SENSE to pay off the funds that are being charged interest before just stock piling money that's just sitting there, but DR isn't about "theory" and the logical order of doing things. He looks at human behaviour and psychology. By creating an emergency fund first you're taking control and giving yourself power so you never have to resort to borrowing when something comes up (and something WILL come up...especially if you're not prepared for it). You feel safe and better prepared and get out of the habit of relying on credit to cover your rear.

Anywhoo, there ARE methods to his madness and they really do make a lot of sense once you look into WHY he sets the steps the way he does. One of the big ideas I like is roughly along the lines of: if it were purely numbers and theoretical logic (like paying down the highest interest first) then why aren't you out of debt yet? He really acknowledges that there's more to it than numbers.

[RunningMomTegan]

If you wanted to and felt comfortable doing so, posting a budget for feedback here might be a good idea.

Be sure to include current debt payments, current debt totals, current amount in savings, current retirement contributions, and net income.

There are things that Ramsey suggests (as do Clark Howard, Suze Orman, etc) that will build and emergency fund while not stopping your retirement contributions (if those are near and dear to your heart). Cutting off cable, eating on a strict budget, using cash envelopes, etc.

We're maintaining two households right now, and to make it work I turned down the thermostat, cut the cable, changed internet providers, wash more clothes on cold and gave both my husband and I a strict $80 a week to cover ALL expenses for the 5 months we're apart. I thought it would help us break even, but we're putting more in savings now than we ever have! The discipline of thinking through what we REALLY need and the focus to save up for extras just needed this separation to jump start it! And I haven't cut out everything we indulge in. We still had a wonderful sushi dinner for Valentine's Day and my son and I have been doing museums on the weekends. I just know that when my $80 is gone, it's gone.

Good luck, and if you post for feedback, I think you'll be amazed at the ways you can cut without depriving the things you think are TRULY important.

[dealic]

Originally Posted by eirual

I don't know where you're coming from, so this may not be advice you want/need, but have you really looked into Dave Ramsey? I think so many people recomend him because his theories really work.

If you can, pick up Total Money Makeover from your library. That can be the start of your research (or at least a part of it since it sounds like you've been doing much already). His ideas don't make sense without the background which is well explained in that book.

I haven't read his book, because its out at the library. I have it on reserve.

I had to fight with DH to establish an emergency fund BEFORE paying off the CCs- of course it makes the most SENSE to pay off the funds that are being charged interest before just stock piling money that's just sitting there, but DR isn't about "theory" and the logical order of doing things. He looks at human behaviour and psychology. By creating an emergency fund first you're taking control and giving yourself power so you never have to resort to borrowing when something comes up (and something WILL come up...especially if you're not prepared for it). You feel safe and better prepared and get out of the habit of relying on credit to cover your rear.

Psychologically, removing my $500 a month car payment that left me unable to make payments every month IS what I need to feel safe. So for me, its what I need to do first, or every month I am freaking out because I don't earn enough for food after bills, and DH may not get enough hours for us to eat.

It will be gone when I get my tax return back, then two months of "making payments on it" extra gives me my BEF, but I need it gone first. I get the psychology, really I do.

Anywhoo, there ARE methods to his madness and they really do make a lot of sense once you look into WHY he sets the steps the way he does. One of the big ideas I like is roughly along the lines of: if it were purely numbers and theoretical logic (like paying down the highest interest first) then why aren't you out of debt yet? He really acknowledges that there's more to it than numbers.

I was. Then I got divorced and stuck in a lease I couldn't afford and a car payment I couldn't afford. A roommate who moved in to help and quit her job and cost me money. Once it ended, I was stuck with the debt I accumulated sticking it out.

I know he has reasons. What I want is other ideas, instead of committing to his simply because its the only one I know.

[dealic]

Originally Posted by RunningMomTegan

If you wanted to and felt comfortable doing so, posting a budget for feedback here might be a good idea.

Be sure to include current debt payments, current debt totals, current amount in savings, current retirement contributions, and net income.

I think I will try to do this later today. Its a good idea.

There are things that Ramsey suggests (as do Clark Howard, Suze Orman, etc) that will build and emergency fund while not stopping your retirement contributions (if those are near and dear to your heart). Cutting off cable, eating on a strict budget, using cash envelopes, etc.

That's what I need, ideas to cut corners that AREN'T my retirement, because its free money from my work, and I just can't bring myself to stop it. It makes me feel pride to have the small bit I contribute going into it every month. I just don't know how to eat cheaply. I can't keep our expenses down low enough.

We're maintaining two households right now, and to make it work I turned down the thermostat, cut the cable, changed internet providers, wash more clothes on cold and gave both my husband and I a strict $80 a week to cover ALL expenses for the 5 months we're apart. I thought it would help us break even, but we're putting more in savings now than we ever have!

We are finally only maintaining 1 household after a year of living in 2 different countries. But we lived with family during it, and are just getting our own apartment next month. We aren't getting cable or internet (and I don't know how I will survive without it) or a phone. I have never turned on the heat in any apartment I have ever lived in, but laundry is in coin machines so expensive. DH is going to college in the fall so we need to come up with tuition, plus we only have until then until we effectively lose most of the money he does make.

The discipline of thinking through what we REALLY need and the focus to save up for extras just needed this separation to jump start it! And I haven't cut out everything we indulge in. We still had a wonderful sushi dinner for Valentine's Day and my son and I have been doing museums on the weekends. I just know that when my $80 is gone, it's gone.

Good luck, and if you post for feedback, I think you'll be amazed at the ways you can cut without depriving the things you think are TRULY important.

Thank you.

[Denvergirlie]

Well I investigated a lot, DR, Suze, Cheapest family, Gail, Mary Hunt, etc, etc.

The guts and glory, get your expenses down and plow everything non esstential to debt.

I listened most to DR, he speaks in no-nonsense language.

I never read his book, TMMO, but did follow his basic "steps".

For me, my baby emergency fund needed to be larger than $1K, so I went with $3K. Never had to touch it thankfully, but it gave me a basic sense of security and I was able to sleep better at night.

I snowballed my debts, smallest to largest, which fortunately for me was also the highest interest rates to lowest interest rates.

After some self deprevaition, I am now debt free.

It doesn't really matter who's "plan" you follow, what matters most is that you have a plan. Without a plan, you have no direction, it's like taking a road trip to a place you've never been without looking at a map.... foolish.

Try not to get hung up on who's plan you are following, just make sure you have a plan. For me, DR worked. It's about changing habits, and one of those habits was to not acquire debt again, so thus the BEF was mandatory.

I've seen it happen time and time again with friends/ family. They spend all their money and when emergencies happen, they are broke. My IL's just went 1 month without a car... why because they didn't have a measly $250 in a savings account to fix the problem that developed.

I can relate with the desire to get rid of debt and see that the EF is just sitting aside, but as the saying goes.... it's gonna rain again, you don't know when or how long the rain will last, it might be a sprinkle or a hurricane, but it's gonna rain, you can count on it. When it rains, wouldn't you like to have an umbrella or at least a rain coat so you can stay dry? It's the same thing with a baby emergency fund.

[enfpintj]

We really just made our own plan. I read lots of books like The Tighwad Gazette for frugal ideas, Your Money or Your Life for new perspectives on money, Dave Ramsey book and radio show for support only. I also like All Your Worth by Elizabeth Warren. I've never much like Suze Ormon. my dh is a budgeter so he created our plan ,and I just learned not to spend anything unless we need it and even not then sometimes.

As far as Dave's advice these days I think people need to have a bigger emergency fund before paying off debt or concurrently saving and paying down debt. Just reading posts here have made me see that people were diligent in paying off debt and then lost a job and had very little money to survive. His advice for $1000 works great when people aren't losing their jobs and houses right and left.

good luck and just keep at it. The person who talked about the importance of just having a plan was right on.

[RunningMomTegan]

Originally Posted by dealic

I just don't know how to eat cheaply. I can't keep our expenses down low enough.

This was the biggest hurdle... the food. Read up on what some of the folks here have been doing by stockpiling. Once I learned that unless it's on sale, I don't buy it, I've been doing great. Yes, sometimes all I buy in a week is chicken breasts and milk, but I have enough in the freezer to make up for it. The next week I might buy 8 loaves of bread! My husband thinks I'm a little crazy, but I'm feeding one pregnant/nursing lady, a 2 year old and a very active man for $60/wk.

You will also probably qualify for WIC/food stamps (didn't see if you have little ones) which will help.

[dealic]

Originally Posted by RunningMomTegan

This was the biggest hurdle... the food. Read up on what some of the folks here have been doing by stockpiling. Once I learned that unless it's on sale, I don't buy it, I've been doing great. Yes, sometimes all I buy in a week is chicken breasts and milk, but I have enough in the freezer to make up for it. The next week I might buy 8 loaves of bread! My husband thinks I'm a little crazy, but I'm feeding one pregnant/nursing lady, a 2 year old and a very active man for $60/wk.

You will also probably qualify for WIC/food stamps (didn't see if you have little ones) which will help.

I am in Canada so we don't have WIC or food stamps...

I am hoping to be gifted a freezer soon, so I will be able to better sale shop. Its more that I am spoiled about my food. I eat brand name things and expensive cuts of meat. Love fresh fruits and veggies but won't eat frozen or canned.

Plus I work a lot of weird shifts and find it hard to have time to prepare meals. I also want the freezer so I can make ahead meals and freeze them for us.