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Getting out of debt in APRIL!

post #1 of 26
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 are 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, http://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

 

Welcome.gif

post #2 of 26
Thread Starter 

Sorry for the late start. I tried creating a new thread a few days ago and kept getting "fatal error" messages.

 

So, here we are in April!!

 

What's the near future looking like for you??

 

Ours is very un-stable-looking what with a babe on the way, a new house coming only 2 weeks before babe, and DH finishing school and looking for summer work that can continue part-time through next school-year.

 

So long as DH can get to bringing in income and I can make a bit of cash on the side once summer's done we'll be golden, but those are admitedly a lot of "ifs"...we always manage to make things work though, so I'm hopeful it will all work out! I'm anxious to get settled with a predictable income though and get on with things....we're in this awkward lull at the moment where it's too soon to do anything productive (other than save) but the storm of chaos is coming.

post #3 of 26

I really have nothing to complain about, but I feel itchy.

 

We recently completed BS3 and I was supercharged to move on to paying down the mortgage. But in March, we had to spend $1k on certain required items and we will have to spend a couple of months paying ourselves back. Boo-hoo, right? I guess I would have felt better about it if I had 3 months of paying down the mortgage under my belt, it's just like suddenly I'm next in line for the ride but I have to wait and wait.

 

Also feeling a bit anxious about our gas budget, which is not a big deal really, but our spending on gas suddenly doubled last month (there were a couple of extra trips, but I didn't think it would DOUBLE our spending) and now, on just the 6th of the month, we are $10 away from our usual MONTHLY gas expenditure, and we have the whole month left to go! So I'm a little freaked out, wondering if there's something wrong with our car or what. We haven't even gone anywhere this month (like, the grocery store and the park and the YMCA... but 100% right here in town).

 

Last summer we had a similar spike in gas expenditures. We never conclusively proved anything, but I suspect that the gas station we were using (which we used because we got rewards points from our grocery store) sold seriously inferior gas. We stopped using them and also put in some fuel cleaner or whatever the product is, and suddenly it got better again. So maybe it wasn't the gas station but time for more fuel cleaner. It's crazy - the cleaner is like 5 bucks, but we're spending $60-$100 more a month on gas with this problem. I'll be sending DH to pick some up today.

post #4 of 26

My problem with the gas budget is that it's jumping $.10 a gallon every week!  Blech.  I can't wait until summer when DH only has to drive to work and not to school as well.  That will cut our gas expenses by a third at least. 

 

I had to get some dental work done, so I have to pay for that... I'm thinking I might just tally up all our medical expenses from the beginning of the year and take a chunk out of our flex account and put it into savings. Might as well be making interest on it.  That would actually get our $1000 base emergency fund fully funded, bringing our total in savings to $5000.  We hope to have $7000 by the time Christmas roles around, so here's hoping we don't blow it this summer.  Summer is hard for us.  So many fun things to do!  I wish we could be attacking our debt with all this money in stead of just saving it, but the uncertainty of DH's student teaching next spring has us stockpiling at much as we can.

post #5 of 26
Thread Starter 

Contrariety, you'll be happy for that cushion when you need it (and wouldn't it be wonderful if you didn't and could wipe out debt, or at least put a big hole in it). Preparing for a storm you know is coming can be so hard when you'd rather get results NOW!! Think big picture though...after student teaching (hopefully) means then comes a great salary and stability with a good pension and you'll be able to pummel your debt!

 

 

post #6 of 26

Still plugging away on BS2 here.  Today was pay day, and I sent a big chunk over to American Educaitonal Services.  I feel like the little engine that could some days.  I think I can I think I can I think I can.  Then other days I look up and realize how much better off we are now financially than we were six months ago.  Day by day I feel like there's so little progress, but then you look back several months and you see the progress.

 

 

Anka

post #7 of 26
Thread Starter 

I was just on my way to the store to pick up a few small things to get us through the week and lost $20 out of my back pocket. We re-traced our route home (since we walked) with no luck and I went back out and it's definitely gone. So, no butter, ketchup, eggs or deodorant for us this week greensad.gif.

 

 

post #8 of 26

Ahhh, I'm still posting on March. LOL  Glad I found the new thread now.  

 

As I shared on the last thread, we got a surprised gift which has completed BS3 for us!  We need to go back and pay off the car we bought last Dec, which we owe less than $3000 on.  Dh's income is variable and has been on the low end for several months now, so I don't know how quickly we'll get that paid off, but it will be much faster now that I don't have to try to put everything back into our depleted EF.  After that, we'll start working on the student loan.  We also need to research refinancing our home.  We've been back and forth on it, and were almost ready to do that and then had to buy a new car, so there went the money we'd saved that would have made refinancing possible.  So if we can refinance, we'll roll the two mortgages together, and that'll be that.   

post #9 of 26

I just went over to check our bank's finance tracking software.  I can hardly believe that in 3 short years, we have gone from a negative Net Worth of over $12,000, to now being positive $31,000.  My dh's annual income is only slightly higher than that.  If we could do it as a family of 10 on less than $40,000, anyone can do it.  Yes, it requires commitment, strategy and lots of belt tightening, but we've been suffering from our poor decisions for years and years previously.  While we just got a significant bump ahead with BS3 with the gift from dh's grandma, most of it was determination and hard work with our own resources.  

post #10 of 26
Quote:
Originally Posted by eirual View Post

I was just on my way to the store to pick up a few small things to get us through the week and lost $20 out of my back pocket. We re-traced our route home (since we walked) with no luck and I went back out and it's definitely gone. So, no butter, ketchup, eggs or deodorant for us this week greensad.gif.

 

 


hug2.gif That's an awful feeling! My husband lost over $100 the same way a few months ago, so the rule is now all money must be in a wallet. Too easy to pull it out with out realizing it and lose it if we keep it loose in our pockets.

 

post #11 of 26
Quote:
Originally Posted by mylilmonkeys View Post

I just went over to check our bank's finance tracking software.  I can hardly believe that in 3 short years, we have gone from a negative Net Worth of over $12,000, to now being positive $31,000.  



clap.gifWay to go!

post #12 of 26
Subbing. I've been working so much at my new job. I worked OT last week, which made the paycheck this week so nice. We're finally caught up from my maternity leave (a month later than I had anticipated) plus I'm paying this month's car payment a little early. I'm not going to be able to scale back my work as much as I had hoped (at least not yet), but at least for now we're coming out ahead. That feels so good. Just two weeks ago our situation looked completely desperate (I was bawling adjusting the budget and paying bills). But this OT came available last week so I took it, and it really paid off this week. So happy about that. joy.gif

I also paid off the midwife this week and put a little chunk toward paying off the dentist. That should be paid off next month, and then I can apply my snowball to the next thing. The snowball's not growing by much, but it's nice to tick something off of the list.

I don't see the light at the end of the debt tunnel just yet, but not rolling backwards feels great.
post #13 of 26

Here's DR's plan:

Pre-Step 1: Get current on your debts and do a budget
0.1 No new borrowing. Agreed!
0.2 Talk with spouse and get him/her on the same page as you concerning finances. I think we are there!
0.3 Do a written budget Done
0.4 Temporarily stop all retirement contributions Not doing this because contributions are matched by my employer so I'd be giving up free $$.  The $$ going into the fund isn't counted in our budget at all.
0.5 Get current on all the basics (Shelter, Food, Utilities, Basic clothing) Done
0.6 Amputate "toys" (bikes, boats, ATV's etc) to help snowball No "toys" to amputate
0.7 Cut lifestyle (Cut cable, cell, extras, eating out) and/or get a second job to raise $1000 EF. Recently cut net flix, one cell phone, etc.
0.8 Get current on ALL bills done

BS1 $1,000 to start an Emergency Fund
1.1 Chop up/freeze CC's (You have an EF now) - Done
1.2 Get Health insurance NOW if in the US N/A, in Canada
1.3 Get Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died. DH and I both have insurance
1.4 Amputate cars that you can't pay off within 24 months Under Consideration - See below!

BS2 Pay off all debt using the Debt Snowball
2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest. - crunched the numbers, and working on highest interest rate first as this will save us more $$ in the long run.

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 - currently investing about 4% which is then matched by my employer.  Will contribute more when debt is repaid.

BS5 College funding for children - small fund thanks to a gift to DS from my parents

BS6 Pay off home early

BS7 Build wealth and give! Invest in mutual funds and real estate
 

 

____________________________________________________________________________________

 

Hi all, it's been a busy month so I'm only getting here now.

 

DH is onboard.  He will pay off the balance on his CC this month, and I've put our monthly contribution towards debt repayment as part of the plan, as well as some $$ towards our emergency fund.  We have a written budget but I have to admit we aren't actually following it yet!  We ARE committed to the debt payment plan and the emergency fund plan, so I figure as long as we make it to the end of the month with a positive balance in the account, then that's ok (for now).

 

I posted this in TOA, but I would appreciate your perspective on this too:

 

DH and I are thinking that we'll need a different vehicle when we have DC2 (sometime in the nearish future, I'm not expecting yet but we will be TTC soon, so in the next year or so).  Our Subaru Forester is great, and we love it, but we don't have room for 2 car seats when one needs to be rear facing.  We were thinking that something like a Ford Flex or a minivan would meet our needs better.

 

Our inlaws are selling their Buick Rendevous (I think it's an 06) which would be a good minivan alternative.  They would give us a very good deal on it.  Essentially if we sell our Forester now, and buy the Rendevous we could also put around $10-12K towards debt repayment because our '08 Forester has really retained its value.  Rendevous in general tend to have some front end issues and some work has been done recently on this one.  Our inlaws are selling in part because they don't like how loud the ride is, but our Forester is very loud anyway.  I've driven in their Rondevous and I like the bucket seats in the back, and the ride is more comfortable than our current vehicle.  Fuel economy is a bit better in the Forester (21MPG overall) than the Rendevous (19MPG overall).

 

Are we jumping the gun here?  Should we keep our beloved Forester for another year until DC 2 comes along, or should we trim some debt and get the bigger vehicle we will need in a year or so anyway now??  I do love my Forester but I also love the idea of chopping 10-12K in debt!  My real concern with the Rendevous is potential reliability issues, which could mean mechanics bills and also the extra fuel consumption.  That being said, our car is 4 years old so it could have problems, but Foresters are notoriously reliable.

 

Thanks!

post #14 of 26
Quote:
Originally Posted by eirual View Post

I was just on my way to the store to pick up a few small things to get us through the week and lost $20 out of my back pocket. We re-traced our route home (since we walked) with no luck and I went back out and it's definitely gone. So, no butter, ketchup, eggs or deodorant for us this week greensad.gif.

 

 


Hugs, mama. I hate when things like that happen.

 



Quote:
Originally Posted by mylilmonkeys View Post

I just went over to check our bank's finance tracking software.  I can hardly believe that in 3 short years, we have gone from a negative Net Worth of over $12,000, to now being positive $31,000.  My dh's annual income is only slightly higher than that.  If we could do it as a family of 10 on less than $40,000, anyone can do it.  Yes, it requires commitment, strategy and lots of belt tightening, but we've been suffering from our poor decisions for years and years previously.  While we just got a significant bump ahead with BS3 with the gift from dh's grandma, most of it was determination and hard work with our own resources.  



Amazing, and really inspiring! We're not quite there yet, but we have wiped out almost 25k in high interest credit card debt over the last 2 years, all while dealing with bouts of under employment and unemployment, and the birth of our surprise dd! So we'll get there.



Quote:
Originally Posted by nstewart View Post

Our inlaws are selling their Buick Rendevous (I think it's an 06) which would be a good minivan alternative.  They would give us a very good deal on it.  Essentially if we sell our Forester now, and buy the Rendevous we could also put around $10-12K towards debt repayment because our '08 Forester has really retained its value.  Rendevous in general tend to have some front end issues and some work has been done recently on this one.  Our inlaws are selling in part because they don't like how loud the ride is, but our Forester is very loud anyway.  I've driven in their Rondevous and I like the bucket seats in the back, and the ride is more comfortable than our current vehicle.  Fuel economy is a bit better in the Forester (21MPG overall) than the Rendevous (19MPG overall).

 

Are we jumping the gun here?  Should we keep our beloved Forester for another year until DC 2 comes along, or should we trim some debt and get the bigger vehicle we will need in a year or so anyway now??  I do love my Forester but I also love the idea of chopping 10-12K in debt!  My real concern with the Rendevous is potential reliability issues, which could mean mechanics bills and also the extra fuel consumption.  That being said, our car is 4 years old so it could have problems, but Foresters are notoriously reliable.

 

Thanks!

 

Man, what a tough call. I would try to calculate just how much the difference in MPG will actually cost you. But if your Forester hasn't had any problems yet and you think there could be reliability issues with the Rendevous, well that would give me pause. I was nickled and dimed with my last car--little by little small things kept going wrong with it and I felt like I had it in to the mechanic at least once every couple of months for the last year or so of its life--and that added up to be nearly as costly as a transmission failure or something similar. My point is that you could lose a big portion of that $10-12k "extra" through mechanics bills if things don't go well. Good luck in making the best decision for your family!

 

As for me--when we first moved into this place 5 months ago, one of our neighbors helped us move our fridge in and told us that his family had lived in this unit a few years ago and had moved out after his wife had baby #2. He told us that this place has good feng shui, that it would attract money to us and that it has a reputation for couples moving in with one baby and moving out with two.

So that was kinda fun to tell people about. I know nothing about feng shui, so I looked it up online and I guess there is a way to map out your home with feng shui areas or something, and it was kinda funny how well the map fit our place. Meaning that the area of career and education is right where we have our computer, the area for children and creativity covers part of our bedroom and part of the livingroom where we keep Ela's toys, the area for marriage is over our bedroom, etc. I don't really take stock in that stuff, but I guess I'm mildly superstitious and that sort of thing is interesting to me, if nothing else.

Anyhow, I've been noticing lately that we've been spending much more money lately on impulse purchases and eating out. I was feeling a little bit twitchy, as I always do when I know we're going over budget and overspending. I've been writing out budgets every month, but I've been slacking on tracking our income and all of our spending. Still, I noticed that we've been hitting all of the items on the budget--we're still paying the same amount toward debts and putting the same into savings each month, and our utilities and bills all get paid. We've even gotten smart phones since we moved in, which cost a lot more monthly than our old crappy Virgin mobile phones were costing us. I couldn't figure out how none of the areas on our budget was taking a hit while we were definitely spending more on extras.

So I went back and tallied our income, and it turns out that since we moved in we have consistently brought in an extra $400-500 every month. And that's net income.

Maybe that dude was on to something.

I intend to tweak the budget next month to make sure that we're putting more of that extra money in savings and not just getting more stuff or eating out more. And I'm crossing my fingers and knocking on wood that our income stays up. Summers are usually good for DH's income, but now that I'm working at an elementary school instead of waiting tables, Summer will do the opposite for my income. I've already applied for any open positions during the summer months, and crossing my fingers that something pans out. I did recently get notice that my EDD benefits are extended for another year, at the same weekly rate that I had for the first year. That was unexpected and such a huge relief. And it kind of re-inforced the idea that this is the year to start TTC a baby brother for DD. I'm only working part-time at the school, so I'll have plenty of time at home with the little ones and still manage to bring in enough money to keep us moving forward.

 

Currently we've got just under $3k in credit card debt at 0% and our savings is at $3,500. We're hoping to get the debt down to $0 before the interest rate goes back up in a year, and I'd like to get the savings up to at least $6-7k before we start TTC in September, and then up to $10k before baby comes!
 

 

post #15 of 26

Well, the Dave Ramsey program ended a week ago.  Need to balance out DH's last two pay periods before I get paid.  Furnace took a hit last week - some pressure switch failed so that took money, then the dehumidifier compressor died so needed to get a new one for the basement, and then there are taxes to be paid.  Not a good financial week.

 

But on the debt snowball front, we have paid off another debt!  I am trying to get our debt payments to be in line with my DH only working 40 hours a week, not the 50 he has been.  Basically if he didn't work over time, we wouldn't have cash to eat, although I need to put that in perspective and say, there would be a bill that wouldn't be paid that month, since eating is necessary.

post #16 of 26

Way to go on your progress lilacvioletiris!  

 

AFM, of course what ever happens when you get a windfall happened!  We had our bus in for a problem and discovered a whole heap of other problems.  So, thank goodness for the money when it came in, because we would have had to acquire more debt otherwise.  We still have half left, and this is about 3.5 mo of expenses worth for us.  So I am still choosing to consider BS3 conquered, though it isn't the full 6 mo I had in my plan.  I am rethinking how God wants me to find my security, and I believe He's asking us to stretch our faith at this time and not simply rely on our own means and financial plans.  So, I'll continue to proceed, knowing that probably my plans will be rewritten.  It's taken me a few days to get to this point, because I really was frustrated and upset.  Plus, I was coming down with a bad cold/flu and I'm still under the weather. It's hard to cope when you aren't feeling well.

 

In other news, DH got two soda orders last week after not having any for a long time.  Apparently commission on soda is a bit higher than what he usually earns on water bottles, so I'm hoping that means a nice bump in the paycheck and that these orders will continue.  Also, a neighbor is inquiring on purchasing our old van.  It needs to be used for demo derby or something along those lines (which is this neighbor's hobby) because the doors are not functioning well anymore, but the mechanics run well and it has 1 year old commercial grade tires.  Hopefully we'll get together this week and see how much they're willing to pay for it.  This will be the second vehicle we've sold off our property without advertising it, if it happens. LOL

post #17 of 26

Wooo hooo! I have just finished BS2!!  I paid off my student loan yesterday.  Feels soooooo good. Now, on to BS3.  I think this will take a while, especially since I will be out of work on mostly non-paid maternity leave this fall and we will likely have to dip into our current savings (only about 2 months of savings at this point).  However, now that I'm not making monthly student loan payments of $200 or more we will be able to save more.  Thank goodness for that!

On the not-so-great side I have made several (ahem) impulse purchases on baby stuff lately.  I have a total weakness for organic baby clothes on sale from Zuilily and other sites.  I really need to stop opening those emails for a while!  It's time to get serious about our savings in these last few months before we become parents...

 

lilacvioletiris-- congrats on paying off a debt!

 

post #18 of 26

That is awesome lakeruby!  Way to go!

post #19 of 26

 

Quote:
Originally Posted by lakeruby View Post

Wooo hooo! I have just finished BS2!!  

 

 

joy.gifthumb.gif

post #20 of 26
Thread Starter 

Congrats on all the progress!

 

We've got good news too...DH just found summer employment, in town (no commute/gas...yahoo!) with a decent wage. That was part of our plan, but it's nice to have something official. He'll start Monday. With him being in town and my mom being done her schooling now, we can save on gas AND childcare while bringing in a (much needed) extra income.


We have some big expenses to pay in the near future (new house and closing costs June 1st, tuition mid-June), so we still have to keep things tight, but at least things are heading in the right direction!

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