I've been following along for a while, but haven't posted. I'm finally feeling like I am making progress and want to share. : )
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) Almost, I got all the bills caught up this month, but I need underwear, DD1 needs shoes, and DH needs a new pair of jeans.
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. We are mostly good here, but I am trying to convince DH to change our auto insurance back to the state minimum.
0.8 Get current on ALL bills Almost done here too, I have one more medical bill that I should be able to pay next month.
BS1 $1,000 to start an Emergency Fund We have zero emergency fund right now, I feel like we are constantly having to rebuild
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. I don't see this as a priority
1.4 Amputate cars that you can't pay off within 24 months
BS2 Pay off all debt using the Debt Snowball We owe some money to family, and then my school loans, and then DH's school loans. I can't wait to get started on these! I was doing this before and have already paid off all our credit card debt.
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 This is becoming a priority, but if we don't have enough saved when the car dies, we can make do without one, although it's not fun.
3.2 Save up 20% for home purchase OR pay down existing mortgage to the point you can drop PMI. Already have the house, in two more years the PMI goes away, hopefully I can ditch it before then. : )
3.3 Start furniture or other non-essential stuff replacement fund This is another one that I don't see why it's important. Freecycle all the way.
I can't wait to move onto these baby steps. Right now they seem very far away. I really really really want to pay off my house, that is my big financial dream right now.
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