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Getting Out of Debt in May

post #1 of 51
Thread Starter 

Do you want to get out of debt? Start living on a budget? Be able to start saving? Then this is the thread for you.  Some 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:

Pre-Step 1: Get current on your debts and do a budget
0.1 No new borrowing.
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) to help snowball
0.7 Cut lifestyle (Cut cable, cell, extras, eating out) and/or get a second job to raise $1000 EF.
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
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

BS2 Pay off all debt using the Debt Snowball
2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest.

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: http://www.daveramsey.com or if you want a good DR discussion forum, www.llnoe.com is good but hardcore. Gail vax Oxlade's Til Debt do Us Part is great tv show, very motivating. Her website is: http://gailvazoxlade.com/blog Others like Suze Orman or Mary Hunt, really doesn't matter whose method you use, just start the process to getting out of debt.

post #2 of 51
Thread Starter 

Thank goodness April's over. I've now got my kids spring and summer programs all paid for and can't wait for my May cheque. Its funding my trip out to see my sister in June! This is the start of a four month period where we should be able to throw a decent snowball to bs4. If we really scrimp, there may be extra to up the kids school funds. Hope everyone is having a good month.

post #3 of 51
Quote:
Originally Posted by mtm View Post

Thank goodness April's over. 


AMEN!!

 

I'm looking forward to May! thumb.gif

 

We're living off of one income now, so our progress on debt repayment (one more month to go!!!) should be phenominal and hopefully continue on so we'll get a good savings going too (as a teacher, I'll be off work at the end of June, then in September DH will be going to school and I'll be working FT- which will be great for us).

 

I'd love to fast forward to July :)

post #4 of 51

This month is going to be horrendous and mostly likely a step backwards.  We are moving and a bunch of stuff came up that wiped out our savings so moving is going to HAVE to involve some CCs, not moving is not an option obviously.  I should be able to get most stuff paid off before DH gets home from deployment so... yeah.  Hopefully by fall things will be back on track *facepalm*

post #5 of 51

BS 0 : Complete!


BS1 : Complete!

BS2 Working on BS2 here!  $9,943.72 to go! (Started 2011 at about $17,500)
 

 

I don't expect to see progress over the next few months. We are closing on our dream home may 23rd, and I expect to spend the new few months doing some updates and decorating to suit our style (which is not...country floral wall paper). Also, I won't be babysitting after the month of June, so that is a $500 a month loss in income. Other than the new mortgage (we currently do not have one, our two rental properties are paid off) we will not be incurring any debt over the move or the redecorating plans. The new mortgage will be a 20 year fixed at 4.6% (not exact on the interest yet, but that # is close). We are putting down at least 25%, the payments will be about 25% of our take home pay. Our goal is to double up the payments and have the house paid of ASAP, neither DP or I like having debt.

post #6 of 51

Glad April's over.  Easter cost way too much.  I took the opportunity to buy all the kids dress clothes and most of them shoes for church, so they are properly outfitted, but it is hard to see that money go.  But, with as much work as I have put into paying off debts, we actually had the money to spend. Yay!! thumb.gif

 

Started using our new budget with last Friday's paycheck.  This is the tight one, with mortgage and nearly everything but utilities due.  If we can squeak through this half of the month, the second half should be a breeze.  We have two birthdays this month, too.  This'll be so much easier next year with the gift fund firmly in place.  

 

We have a few hundred left to establish our EF, less than $900 on our last CC to pay off, and just started funds for auto maintenance(including stickers), insurance, gifts, and back-to-school. BS???  Most of these things come due in the middle of summer, so I wanted to start the funds now to get where I can, and by next year we should be golden.  I am so thankful for this forum!!  We live on a very tight income, but we can make it with proper planning.

post #7 of 51
Hooray it's May! Really looking forward to paying our second car off (first one was bought with cash) once we receive our tax refund and then we are going to sell it! DH commutes quite a distance to his great job so we are keeping one for the moment, but my situation recently changed so I now either walk, bike, or bus to my jobs.

BS1 and PS1 are complete so time to lose our debt! Credit cards are zero balance each month so besides mortgage and car number two we just have my student loans - $17,100 in four separate loans. Should be able to snowball what was our car payment into my lowest balance student loan soon.

We also continued making great progress last month cutting out nonessentials like a gym membership and a parking space we didn't use. We also cleaned out a storage unit DH had from before we met that we should sign closing papers on this week. I'd like to keep finding and eliminating more things like this in our life.

Good luck to everyone!
post #8 of 51

Well I am still working on coming up with the baby EF. Not quite $200 in there so far. I feel like I'm not getting very far very fast. I guess Dave would say to sell my car? Then I would need to come up with the $5,000 that I'm upside down and have no way to get around. I guess not eveything is black and white.

 

Geez I'm really cranky! On a better note, I am waiting for a call back about a side job that has the potential to make a lot of money. I'm a little skeptical though. I'm already working my shift at the crack of dawn so I can work before DH goes to work. That way we avoid child care costs. No wonder I'm cranky. Now I have to go do chores!

post #9 of 51

subbing back again... as I've been lurking and following in March and April.  We have some tight times coming up, but I am hopeful we will make it without hitting up any of the credit cards.  We have actually been very good in not touching any of them or using them to the point where we're considering canceling them this year.  The only reason we've left them open is to maintain a good credit/debt ratio for our credit reports.

 

 

post #10 of 51

ktg... love you sig line :D

 

Chely... bummer you gotta use the CC's, but I am sure that you will get back on top again. :D

 

trekkinggirl...let us know about the job.

 

Not much new here.  Still house hunting ( we may have found a steal, but not for sure yet).  Dh is seriously thinking of getting back into law and some opportunities have come his way that look very promising.  I have had to add to our vacation fund since the price of gas has gone up.  I hope it doesn't continue, but I am prepared in case it does.  I still have been throwing a bit extra at the student loans, though I probably should throw it at our down payment on a house.  Glad I have this group or this slow progress could make me crazy :D

post #11 of 51

So far today has been a bit of a bummer. I had a few unexpected medical expenses pop up - a dental bill that was about $100 more than I had expected and a visit to the walk-in for Tendonitis. I had to wipe out my sinking funds for DS1's birthday party and my car registration. I didn't have to touch my emergency fund, and I am confident I can build those two funds back up before they are needed. I'm having a hard time watching the amount in my savings account decrease, but at the same time I'm glad that I had the money available. In the past the $ would have come from my grocery budget, or the bill wouldn't be paid. Hoping the rest of May is less expensive!

post #12 of 51

so DH wants to pay down the first creditcard without saving the BEF first. I told him we need it so we don't have to charge a credit card when murphy hits. He says he needs some gratification and is anxious to have some momentum of the snowball. He thesiden showed me the $44 per month were being charged interest on the $2000 credit card he is trying to pay off. That was an eye opener to me! I had no idea it was so steep! He said we are getting an unexpected $400 check coming up here because he didn't use his sick leave last year. He agreed to put half of it away and the other half to the card. It is just taking us so long to come up with the darn BEF! I am anxious to start paying off some debt too but I want to follow the plan so we can have a shot at success. I still only have $200 in there. My last check was my first since maternity leave and I was only paid for one week instaed of two because payroll is a week behind, otherwise I would have added more when I got paid.

 

I never got a call about that side job either. I would call but I was referred by a friend and don't have any contact info myself. I followed through with the friend to remind him to call. Maybe I will get a call this week. My baby is only three months old. Maybe a second job right now is a little unrealistic at this point. I just really need more wiggle room to get things rolling.

 

 

 

 

post #13 of 51

trekkingirl, do you have stuff you could sell off? Areas in the budget you can cut for a month? I had to fight DH to build the BEF before paying off debt too- I used the argument in Dave's book that if the math worked everyone would be debt free. It's behavioural and taking ownership/care of yourself that gets you set in the right direction. It's totally worth focusing on the BEF before paying off your debt. 

 

Good Luck!!

post #14 of 51

I am interested in joining again.  When did Dave add all of those extra steps?  The last time I was in this thread there weren't that many of them.

post #15 of 51

I'm not sure I've seen that official list directly from Dave, but it's all the little things he mentions in TMM. I'm assuming it's just been summarized and compiled.

 

post #16 of 51

I am joining in.  I just depleted my savings with needing four tires.  I mean, I am an intelligent person but tires never hit my radar screen.  So many things I need to learn now that I am single!

 

I will start on my budget today.  Do you include any fun money in your budget?  My Dave books are in storage.  I need a Dave refresher.

post #17 of 51

I tried to sell a 15 piece lot of cloth diapers on Craigs with no luck for the last two weeks in a row. I even dropped the price by $25. I looked up books to sell on half.com like others have mentioned but the few I looked up were only worth a few bucks each! I have a couple strollers I could probably sell. I never use any of them. I always keep DD in the ergo or the moby. What have you guys sold? I need some ideas.

post #18 of 51
Hi ladies, can I join? We don't have much debt but the debt we do have is enough!

We have a $13k car loan, $25k student loans plus $10k parent plus loan that I have to pay my parents back for, $1,000 charged on the CC since last statement on various things that were needed plus a plane ticket to go see my sister's new baby and the $170k mortgage. All in all, not bad.

I am going to start using cash only when I am out and about because I tend to go overboard with the debit card! In fact, I accidentally threw the debit card away and I will NOT be replacing it! joy.gif

Here are our steps so far

Pre-Step 1: Get current on your debts and do a budget - CHECK
0.1 No new borrowing. - CHECK
0.2 Talk with spouse and get him/her on the same page as you concerning finances. CHECK- we had a long talk, luckily neither of us are spenders
0.3 Do a written budget - CHECK- just did that but need to redo it because my hours were cut
0.4 Temporarily stop all retirement contributions - CHECK (we weren't doing this anyway! ugh)
0.5 Get current on all the basics (Shelter, Food, Utilities, Basic clothing) - CHECK
0.6 Amputate "toys" (bikes, boats, ATV's etc) to help snowball - CHECK (we are working on this, we don't have many toys but DH has a vintage car that he is trying to sell, yay!)
0.7 Cut lifestyle (Cut cable, cell, extras, eating out) - CHECK (we already only had prepay cell phones that we don't use much, $20 vonage home phone, $10 cable tv for just the network channels, and $30 internet which we need for DH's side business)
0.8 Get current on ALL bills

BS1 $1,000 to start an Emergency Fund - CHECK - just saved up enough to put $1,000 in savings for an EF!
1.1 Chop up/freeze CC's (You have an EF now) - We do still use the CC for gas because I can't leave the kids in the car to go pay in cash
1.2 Get Health insurance NOW if in the US - CHECK
1.3 Get Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died. - CHECK but I want to increase it.
1.4 Amputate cars that you can't pay off within 24 months - Working on this now!!


So that is how far we are now, looking forward to reading along, thanks!! joy.gif
Edited by GirlBoyGirl - 5/10/11 at 7:08am
post #19 of 51
Quote:
Originally Posted by trekkingirl View Post

I tried to sell a 15 piece lot of cloth diapers on Craigs with no luck for the last two weeks in a row. I even dropped the price by $25. I looked up books to sell on half.com like others have mentioned but the few I looked up were only worth a few bucks each! I have a couple strollers I could probably sell. I never use any of them. I always keep DD in the ergo or the moby. What have you guys sold? I need some ideas.


TrekkingGirl, my advice is just keep trying! I have listed stuff on CL over and over with no bites and then one day, someone actually comes along that wants to buy! I listed these cloth diapers so many times and then I decided to just try one more time and then someone came and bought the whole lot!
post #20 of 51

Would love to join in (if you'll have me!). I used to post over on LLNOE re:Ramsey stuff,  but it's not up anymore :(.

 

We have recently made some HUGE progress that I am really excited about. It helps that DH now has a steady paycheck and is no longer full commission sales.  Yay! And even better that he's able to continue to do the sales-thing after work hours. He sold $50k in products last week and we are supposed to be getting his front-half this week. Going straight to the ccs!  YAY!!! He'll probably only continue this double shift until June, but I'll take it! We have an  ENORMOUS amount of consumer debt, but we've made a significant dent in it and are hoping to be out from under it by the end of next year. We are doing DR a little bit more loosely simply because our last two years have been so rocky with DH's employment. Our sinking funds are already funded through the end of the year. Once dh has a little more job security (he just started a month ago) we may go back to doing things in strict order, but for right now my security gland is working overtime!

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