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Getting out of debt in MAY!!

post #1 of 63
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

 

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post #2 of 63
Thread Starter 

I'm not sure where April went, but ready or not, here comes MAY!!

post #3 of 63

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
I have all the necessaries taken out automatically. We don't have much left, so we keep an eye on the account and spend little or nothing. I should make up a written budget some time, though.
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)
I keep one CC for car/hotel rentals and for certain purchases. It gets paid off completely each month.
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
We just bought a new car that is built into our current budget. It will take a little over 24 months to pay off if we stick with the schedule, but we should be able to pay extra with next year's tax returns.
 

post #4 of 63

Laurie you must be about ready to have that babe?!!!! How's the pregnancy going?

 

AFM  I am still trying to recover from the $4,000 transmission. I got off disability to try to catch up but my work is holding a grudge and only giving me 4-5 hours a week! I took on another job in another field to try to make up for this but found out six weeks into it that they weren't going to pay me like they promised. It really has been one thing after another. I didn't have internet for a while but am back online as of yesterday. My BEF has about $200 in it after using it to live off of when I wasn't making any money.

 

I found a great opportunity as far as rent goes. I got my rent down to $330 per month by joining a fraternity (DH) and staying on their property. It's a nice spot centrally located in a historical district.

post #5 of 63
Thread Starter 

I've still got 6 weeks to go pregnancy-wise, but thos are going to FLY by!!

 

This pregnancy's been so different from DS's (in a good way, I was super sick all throughout pregnancy with DS). It's been hard to not be able to nest since we move June 1st with babe due June 16th. I'm anxiously awaiting summer: new house, new babe, no work! ...these 3 am mothering visits need to stop though! ...sleep is hit or miss...

 

Trekking, I'm sorry that it seems to be one thing after the other. Thank goodness you had your BEF! I hope something good on the job-front comes your way sooner rather than later!

 

Wolfcat, do you have a projected date that you expect to be done BS1?

post #6 of 63

Trekkingirl -- that's really rough.  I'm glad you found a lower rent place, though!

 

Laurie -- good pregnancy vibes headed your way.

 

As for myself, still plugging away on BS2.  We're moving into a lower rent place this month, which is also a bit bigger.  I'm looking forward to having more space and more in the budget each month, but it'll be a challenge to keep the move within budget.  This is the first time we've moved since the baby, and I'm not sure how it's going to work logistically.  Luckily, there's a two week overlap between the two apartments, so we can go slow and steady for the most part.

 

Anka

post #7 of 63

Just six weeks! Yay.......so excited for you.

post #8 of 63

Hey ladies!

 

April was an amazing month for us. Even though I had two weeks off for Spring Break, we managed to make about $500 more than we have every month this year, and since we moved to this new apartment in December, we haven been making close to $500 more than we did before we moved. So that means we made almost $1,000 more last month than we were making in November 2011. It's amazing how much difference $1,000 can make! I managed to pay off our BofA card and then I put the rest in savings. We also ate out a bit more and purchased a few "wants" for our place, but we did so mindfully. DH has been working A LOT and he really enjoys eating out, and I think we're both kind of in pre-nesting phase with our apartment, because we're planning to try for baby number two this September.

 

Our EF is up to $4,000 and we're hoping to have it close to $7k before trying for the next baby, and then I'm planning to go for $10k by the time the next one is born. I'm just holding out hope that things continue to go well for us.

 

Good luck to the rest of you and your plans!

post #9 of 63
Thread Starter 

Wow, Kitteh, those are some impressive numbers and some really great changes! I hope it continues to go so well!

post #10 of 63

We made no movement in April, so I've got big hopes for May!  It's a busy, busy month for us, and that means we're spending more on gas than I'd like.  We have a family trip at the end of the month i have to start preparing for as well.  As long as we're heading in the right direction, I won't get too down about it.

post #11 of 63

April flew by!  We have 2 credit cards with low balances that are near to be paid off, but the overtime DH has been getting is about to be axed since the company says it is giving too much overtime pay (you think, 50 hours weeks from Sept. 2011 to April 2012, yeah).  With the two credit cards paid off, we should be okay even without the extra overtime, but the debt snow ball won't be snowballed yet.  I have an extra summer school teaching job this summer so hoping to use that to get rid of another credit card debt.

 

Bank of America sent me an very annoying letter yesterday saying that they are going to charge me $59 annual fee starting this month.  I haven't purchased anything on this card in months, maybe 2 years.  But we don't have enough money to pay it off which is the only way we won't get the annual fee.  GRRR.

post #12 of 63
Thread Starter 
Quote:
Originally Posted by lilacvioletiris View Post

...

 

Bank of America sent me an very annoying letter yesterday saying that they are going to charge me $59 annual fee starting this month.  I haven't purchased anything on this card in months, maybe 2 years.  But we don't have enough money to pay it off which is the only way we won't get the annual fee.  GRRR.

 

Can you switch to another no-fee card? I know my bank's good about that (even if they have a promo and I accept a card with a fee free for a year and then get charged the following year, they'll take that charge off).

 

Is it worth getting a line of credit to transfer the balance to, then ditch the card?

post #13 of 63

It was a no fee card.  That is just the trouble.  I haven't been able to do balance transfers the last couple of years since the credit card companies keep lowering my credit limit once I get it paid off.  It is like they know I am not spending with it so now they are going to add a fee for "managing my debt".  I am not sure if I would qualify for a line of credit.  DH has one in Canada and keeps saying "lets amalgamate our debt to get lower interest" and I keep telling him no since Dave Ramsey says that "consolidating all debt loses benefit of the low versus high interest rates" or something like that.  I guess I need to call Bank of America so see if they would not put an annual fee on the card.

post #14 of 63
Thread Starter 

I'm not sure what DR would recomend here, but I understand DR's caution against consolodating debt (so many people consoladate, feel the relief, then ignore the debt while continuing rack up more). If it's a reasonable amount and would save you money and you've already experienced progress and are motivated to continue and are able to set up little goals for yourself (like keeping track of what you've consolodated....i.e. $3,000 is credit card A, $500 is whatever, etc. then you can know when you contribute $300 that you've nearly paid off that second debt and keep snowballing that way- I like visuals that you can colour in to actually SEE progress) I see no harm in that IF it's done thoughtfully with clearly out-lined goals (i.e. give yourself a time-line and track your progress to keep accountable).

post #15 of 63
Quote:
Originally Posted by lilacvioletiris View Post

 I guess I need to call Bank of America so see if they would not put an annual fee on the card.

DH is an immigrant and his first credit card was a Capital One card that offered a ridiculous interest rate, but no annual membership fee. Now, 3 years later, we get a notice that they're charging us $29 membership fee. I'm assuming it's because we use the card responsibly and pay it off before it becomes due, and they aren't making any money off of us. Unfortunately, my eco-friendly side went paper-free for statements and account updates long ago, and now they hide those announcements away on their websites, which I fail to visit on a daily, or even monthly, basis. The fee just hit a week ago and I'm hoping that I can call and get it reversed or just close the account, since we aren't carrying a balance.

 

I totally understand your frustration with the powers that be, and the control they have over the terms of the credit agreements. I used to have really great credit but a lot of debt. Then the recession hit and as soon as I paid anything down on my cards they dropped my limits, so it looked like I was maxed out on cards, and my FICO did a swandive. Of course, I couldn't qualify for 0% introductory rates because the credit card companies made it look as if I were irresponsible with my credit usage--and I suppose I WAS for getting into debt in the first place--but I never would have maxed out a credit card. So my habits didn't change at all, but the market did, and the way that the market viewed me and my spending habits did.

 

That's when I decided to free myself of the credit card farce. They claim that it is convenient and useful to use their 0% interest offers, but really they are just out to make money and they hold all the power. You know what is REALLY powerful? Cash. You can usually get better deals by offering cash up front. They make money off people who go into debt and pay out the a$$ in interest and fees, but they also lose money on people who default, and the rates of default are rising.

 

That said, I've still got over $2,000 in credit card debt right now. I could pay it off immediately if necessary, but with 0% interest rates, I still haven't. I plan to call CapOne tomorrow about my husband's "membership" fee. Malarky.

post #16 of 63

I think that would be a great.  I am with you on the "make me look bad by lower my credit limit" deal the people have been doing to me too.  I want out, but it will be a couple years before I can get out of debt.

post #17 of 63
Thread Starter 

Well folks, this is all tentative, but we were aiming at getting ourselves almost $1,000 in the hole each month for this upcoming year (with me going on mat leave, DH being a full time student, and having bought a new house).

 

We of course figured we'd make it all work somehow, but it seems we've figured out how! One of DH's friends is looking to go back to school and lower his living costs, so we'll rent a room to him for a year, PLUS a friend is just looking for occassional care for her child as she's returning to work (for a couple days a week) and it looks like it would be an ideal arrangement for both of us if I provide childcare for her. SOooo... with these two things we should come out at very least breaking even (*knock on wood!). Coming out of this upcoming year in the black, living on only half of one income, will be a HUGE blessing!

 

We won't know what hit us when we go back to being a dual-income family!

post #18 of 63

I finally set up automatic saving on my ING account again. $150 every Friday towards the BEF/ house down payment fund. Right afterwards I remembered that the first of the month had come and gone and we totally forgot to pay the bills! OOPs!

post #19 of 63

So excited!  After 2 years of no pay increases, I am getting a $87 a month more pay increase starting in July!  Yeah!  Pay off debt sooner!

post #20 of 63
Thread Starter 

Wow, we're slow around here this month.

 

lilacvioletiris, that's great news!! broc1.gif

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