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Getting out of Debt in February 2013

post #1 of 96
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

post #2 of 96

Here's DR's plan:

Pre-Step 1: Get current on your debts and do a budget - always have been and plan to stay that way
0.1 No new borrowing. - paid off a Christmas purchase this week that DH made with a "new card" to get a deal on the items bought
0.2 Talk with spouse and get him/her on the same page as you concerning finances. - Yep, and we are going through the DR class again to keep ourselves on the same page
0.3 Do a written budget - been doing that for over a year - keeps me confident that we can be financially stable
0.4 Temporarily stop all retirement contributions - contributing only $10 a month just to get the matching of my employer
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 - toys? What toys?
0.7 Cut lifestyle (Cut cable, cell, extras, eating out) and/or get a second job to raise $1000 EF. - Lifestyle had been cut a long time ago and last year's taxes got us our original EF which a new wash machine ate into and then brakes for DH's car - but we have built it back up to $1000
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) - All of my CC are in a block of ice in the freezer.  DH still has his in a folder he keeps in a private location, not his wallet, at least.
1.2 Get Health insurance NOW if in the US - done through work
1.3 Get Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died. - I have life insurance but I think I need to up the amount, DH has some through his work
1.4 Amputate cars that you can't pay off within 24 months - Car should be paid off April 2014 - can't wait for that!

BS2 Pay off all debt using the Debt Snowball
2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest. - Seven down, eleven to go!  Snowballing is great and I like seeing the progress each month as we pay off another debt.

 

Looking for work that begins July 1013 is going as good as could be expected given the time of year when teaching positions are opening up.  I got a call yesterday from someone who wants to interview me on Sunday. Had another email from a location that I don't think will be a good fit for me and my family. Getting my resume and coverletter out there and I am sure something of value will open up.

 

Here is to another month of Financial Peace!

post #3 of 96

This blog post might be inspiring to those of you struggling with budgeting

http://www.modernalternativemama.com/blog/2013/01/30/getting-control-of-your-finances-a-new-years-resolution/
 

post #4 of 96

Any of you use an online "envelope system"?  This blog post has a great list of options.  I used Mvelopes for awhile, but it has been probably 5 years. Reconciling the account was my biggest challenge.  Using a spreadsheet has been better for me.

 

Check out this blog for a list of all sorts of budgeting/"envelope systems"

http://www.abowlfulloflemons.net/2013/01/what-budgeting-software-is-best-for-you.html

post #5 of 96

Another great article I read today: Another 100 ways to live frugally

 

http://theparsimoniousprincess.blogspot.com/2013/01/100-more-painless-ways-to-live-frugally_31.html

 

My favorites

I love GasBuddy!  Saves me on gas every month!

I need to cancel my gym membership.

Interesting idea about using water softener salt for my walkways instaed of "ice melt salt".

Vacuuming out the dryer? Who knew. I have to try this.

post #6 of 96

Got rejected on another offer today, but what's new!

post #7 of 96

Ramsey frowns on playing the credit card game correct? I don't quite remember. I plan to do it with my last cc debt. This month I plan to pay off a small balance cc 270$ and I am going to transfer my other balance 1350$ which % rate is going up now to an offer of 0% for 12 months. I will continue to pay it down with any extra money i get. Given me relying on xdh on my only source of income I do not feel comfortable having less than i'd say 2000$ in savings. Still waiting on february's payment should be in early next week when i will pay off the 270$ card.

post #8 of 96
Quote:
Originally Posted by ILoveMyBabyBird View Post

Ramsey frowns on playing the credit card game correct? I don't quite remember. I plan to do it with my last cc debt. This month I plan to pay off a small balance cc 270$ and I am going to transfer my other balance 1350$ which % rate is going up now to an offer of 0% for 12 months. I will continue to pay it down with any extra money i get. Given me relying on xdh on my only source of income I do not feel comfortable having less than i'd say 2000$ in savings. Still waiting on february's payment should be in early next week when i will pay off the 270$ card.


I know I just transferred and paid off a credit card through a balance transfer to another credit card with a 0 percent for 12 months and then lower interest rate after that.  I want to get rid of credits cards!  I am not sure what DR has to say about it. I didn't open a new card to get the balance transfer option though. I still think it was for the best for me and my DH though.  Look at the amount of balance transfer fees and the overall decrease in interest rate before you do it though.

 

Tonight is the dumping debt lesson.  I hope DH and I can better understand each other with the debt snowball plan after we watch this together.

 

Now up to 24 applications submitted on the search for a new job.

post #9 of 96

I started Dave Ramsey's FPU three weeks ago, today was the budget lesson. It was terrifying to finally have all of our debt, bills, etc. written down. We have more bills than we have income coming into the house - I'm looking at going back to work (the problem being that I'm overqualified for many places that are hiring). We have (my partner and I) five active credit cards - and our total (NON-mortgage) debt is around 58,000.00. Ironically, this isn't much considering we both have student loans, a basically new car, etc.

 

I can't convince DP to stop retirement investing (since his job automatically drafts it from each paycheck).

 

We're going to fill our emergency fund (the 1,000.00 and first baby step) from out tax refund, and use the rest to pay off our largest credit card.

 

I'm selling almost everything, down to the bare necessities. The biggest issue being that people aren't buying things.

 

We've cut out most of our lifestyle/entertainment stuff, we still have internet because we both use it (almost religiously). We're eliminating smartphones, and going back to basic phones which cuts out serious money from our monthly bill. We aren't sure where else to cut back - and I'm not fond of Ramsey's approach to just NOT paying bills, when instead you could simply pay LESS on each bill.  I'm looking forward to seeing how everyone is doing with their DR programs.

post #10 of 96
Happy February everyone!

It's looking like it's going to be an expensive month for me. We are considering dropping the cable, but will probably invest in a WiFi DVD player to stream hulu. DP works a ton an then comes home and works more sewing his heart out trying to get a side business going, so h likes to hav something in th background. Who can blame him. Also oldest DS gets his license at the end of the month etc. Tax return will save me as far as stocking my EF. We haven't done our taxes yet, but last year we got a chunk o change back. That should all go into fully funding the big EF. Then onto down payment savings....
How's everyone else doing?
post #11 of 96

Ooooooppps! It's february now, heehee.

 

Well, I feel pretty good. I actually made it to the second week in our 2 week pay period with money leftover! Even with getting food to bring to a superbowl party and DD's bday party. DH went to fill our gas tank up on Sunday and I handed them the gas envelope and there was a $50 in there. He looked at me surprised and said, "So, I can fill it up?" haha. Usually I tell him to only put in $20 or something because I think I might need the rest of the gas money to pay for something else later in the week. I was like, "YEP! FILL IT UP!!" orngbiggrin.gif

post #12 of 96
Quote:
Originally Posted by MamaArmadillo View Post

I started Dave Ramsey's FPU three weeks ago, today was the budget lesson. It was terrifying to finally have all of our debt, bills, etc. written down. We have more bills than we have income coming into the house - I'm looking at going back to work (the problem being that I'm overqualified for many places that are hiring). We have (my partner and I) five active credit cards - and our total (NON-mortgage) debt is around 58,000.00. Ironically, this isn't much considering we both have student loans, a basically new car, etc.

 

I can't convince DP to stop retirement investing (since his job automatically drafts it from each paycheck).

 

We're going to fill our emergency fund (the 1,000.00 and first baby step) from out tax refund, and use the rest to pay off our largest credit card.

 

I'm selling almost everything, down to the bare necessities. The biggest issue being that people aren't buying things.

 

We've cut out most of our lifestyle/entertainment stuff, we still have internet because we both use it (almost religiously). We're eliminating smartphones, and going back to basic phones which cuts out serious money from our monthly bill. We aren't sure where else to cut back - and I'm not fond of Ramsey's approach to just NOT paying bills, when instead you could simply pay LESS on each bill.  I'm looking forward to seeing how everyone is doing with their DR programs.

 

Maybe you could compromise and have DP only do retirement investing up to the match?  That said, depending on the interest rates of your debt, it *can* be a reasonable decision to continue putting money into a 401(k) or 403(b) plan over paying debt off (more quickly).

 

I haven't encountered DR saying you should just not pay bills.  I'm surprised at that!

post #13 of 96
Quote:
Originally Posted by ILoveMyBabyBird View Post

Ramsey frowns on playing the credit card game correct? I don't quite remember. I plan to do it with my last cc debt. This month I plan to pay off a small balance cc 270$ and I am going to transfer my other balance 1350$ which % rate is going up now to an offer of 0% for 12 months. I will continue to pay it down with any extra money i get. Given me relying on xdh on my only source of income I do not feel comfortable having less than i'd say 2000$ in savings. Still waiting on february's payment should be in early next week when i will pay off the 270$ card.

 

I know that DR isn't fond of using credit cards for daily spending, but I can't see why it would be an issue to transfer your balance so long as you're not adding onto it. And honestly, even if he doesn't approve no one where is going to chastise you for saving some money!

 

Quote:
Originally Posted by BaileyB View Post

Ooooooppps! It's february now, heehee.

 

Well, I feel pretty good. I actually made it to the second week in our 2 week pay period with money leftover! Even with getting food to bring to a superbowl party and DD's bday party. DH went to fill our gas tank up on Sunday and I handed them the gas envelope and there was a $50 in there. He looked at me surprised and said, "So, I can fill it up?" haha. Usually I tell him to only put in $20 or something because I think I might need the rest of the gas money to pay for something else later in the week. I was like, "YEP! FILL IT UP!!" orngbiggrin.gif

 

I love it when we actually have enough in the gas envelope to fill it up! Luckily that's been the case for the last couple of months for us, but we spent a long time having it not be so!

post #14 of 96
Quote:
Originally Posted by TiredX2 View Post

Quote:
Originally Posted by MamaArmadillo View Post

I started Dave Ramsey's FPU three weeks ago, today was the budget lesson. It was terrifying to finally have all of our debt, bills, etc. written down. We have more bills than we have income coming into the house - I'm looking at going back to work (the problem being that I'm overqualified for many places that are hiring). We have (my partner and I) five active credit cards - and our total (NON-mortgage) debt is around 58,000.00. Ironically, this isn't much considering we both have student loans, a basically new car, etc.

 

I can't convince DP to stop retirement investing (since his job automatically drafts it from each paycheck).

 

We're going to fill our emergency fund (the 1,000.00 and first baby step) from out tax refund, and use the rest to pay off our largest credit card.

 

I'm selling almost everything, down to the bare necessities. The biggest issue being that people aren't buying things.

 

We've cut out most of our lifestyle/entertainment stuff, we still have internet because we both use it (almost religiously). We're eliminating smartphones, and going back to basic phones which cuts out serious money from our monthly bill. We aren't sure where else to cut back - and I'm not fond of Ramsey's approach to just NOT paying bills, when instead you could simply pay LESS on each bill.  I'm looking forward to seeing how everyone is doing with their DR programs.

 

Maybe you could compromise and have DP only do retirement investing up to the match?  That said, depending on the interest rates of your debt, it *can* be a reasonable decision to continue putting money into a 401(k) or 403(b) plan over paying debt off (more quickly).

 

I haven't encountered DR saying you should just not pay bills.  I'm surprised at that!


I think in our first or second class our instructor guy said something about that too. Or maybe it was DR on  the first video, I forget. I think he said that he told a bill collector that the company he was collecting for didn't make it to a certain priority level that month so he wasn't going to pay him that month, and the collector asked how to get to a higher priority and (DR or our instructor, whichever it was) said that they would have to have more money next month to pay him and that the collector would have to be nicer on the phone next time. I think I remember, though, our class talked about cable bills and stuff that you could keep on by negotiating what you were able to pay each month.

post #15 of 96
Quote:
Originally Posted by MamaArmadillo View Post
 I'm not fond of Ramsey's approach to just NOT paying bills, when instead you could simply pay LESS on each bill.  I'm looking forward to seeing how everyone is doing with their DR programs.

Like BaileyB said, I think there was a line from this week's debt lesson where DR said some bill collector was harrassing him and DR simply told the collector, "Sorry you are not above the line." The collector wanted to know "What line?" The line where the money runs out. The collector wanted to know how to get above the line. DR said "Be nicer next time." 

 

I think I prefer DR's plan for "Pro rata" where whatever money is left over after you have paid for housing, food, basic transportation, and food is divided up to the different people you owe money based on the percentage of total money you owe them times the amount of money you have left. I had a friend paying maybe a dollar a month to some companies because it was all she had but it was a written agreement between her and the company based on her month budget and money available to pay debts. Pay Less but make sure you tell your creditors why and communicate with them often!

 

Quote:
Originally Posted by BaileyB View Post
Well, I feel pretty good. I actually made it to the second week in our 2 week pay period with money leftover! Even with getting food to bring to a superbowl party and DD's bday party. DH went to fill our gas tank up on Sunday and I handed them the gas envelope and there was a $50 in there. He looked at me surprised and said, "So, I can fill it up?" haha. Usually I tell him to only put in $20 or something because I think I might need the rest of the gas money to pay for something else later in the week. I was like, "YEP! FILL IT UP!!" orngbiggrin.gif

 

That is such a great feeling! Glad you got to fill up the gas tank this week.

post #16 of 96
Thread Starter 

For me, January was a big disaster - so I am hoping that February is a bit better.  At the start of this month, I had a $904 deficit between my income and expenses for the month. That's a lot of money for me. I am working hard at trying to bring in more money. My boss did give me a few more hours work this pay period.

 

So, some bills are just not going to get paid this month.

 

Goals:

1. No more credit card use - this shouldn't be hard as they are now all maxed thanks to the visit from Murphy last month.

2. Continue with 50 cents/week savings plan

3. Update resume to look for more work.

4. Prioritize which bills to pay this month

 

 

Good Luck to all!

post #17 of 96
Quote:
Originally Posted by delightedbutterfly View Post

 

BS1 $1,000 to start an Emergency Fund Working on this. Babysitting money, sold items and possibly a large chunk from DH's next couple paycheques will go to this.

 

$240/$1000 Two more weeks of babysitting money added. Still have to take the Lotto tickets in. I keep forgetting them in the car when I go to the store!

 

BS2 Pay off all debt using the Debt Snowball 

2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest. Currently owe $3767. Would like to have the smaller debt of $930 paid off in the next two PC's. The $2837 is on our personal LOC and I'd like to have that paid off by end April. I'm hoping that I can put $350-550 per pay depending on how much DH works.

 

Paid $100 to the $2675 LOC today. Brings it down to $2575.

Paid $117 to the $517 CC today. Brings it down to $400. 

 

DH was sick and had a couple other days off. So his paycheque was low. And then sometimes they mess up on hours as well so it was even lower than we thought, he needs to check that all the hours were accounted for. We're ok as his last cheque was larger than usual and we'd saved almost $1400 from it but I couldn't put it all to debt like I had wanted. He's working like crazy this pay period so I'm hopeful the next one will be "regular" size :)

 


BS1 $1,000 to start an Emergency Fund Working on this. Babysitting money, sold items and possibly a large chunk from DH's next couple paycheques will go to this.

 

$470/$1000 Two more weeks of babysitting money added and we got a cash refund and I put it in too and finally cashed the winning Lotto tix, $50 extra to the EF!

 

BS2 Pay off all debt using the Debt Snowball 

2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest. Currently owe $3767. Would like to have the smaller debt of $930 paid off in the next two PC's. The $2837 is on our personal LOC and I'd like to have that paid off by end April. I'm hoping that I can put $350-550 per pay depending on how much DH works.

 

Paid $0 to the $2575 LOC today. Stays at $2575.

Put $690 on to the $400 CC today. Brings it up to $1090. 

 

Since DH's pay was shorted I didn't pay any to debt. However he's been working a TON and I am hoping to have close to a $1000 to put onto debt on his PC on Thursday or probably even enough to pay off the new CC balance. However, I have to take a quick two day trip for an important family event and instead of all of us going, I'm just going to go. I still had to put the flight on the CC however. It was $690. I feel guilty but I know how much it means to my parents. And when we moved away from family, we did so knowing that there may be the odd unbudgeted trip home, we are lucky enough however that it doesn't mess with our budget and once the debt is paid off "Travel" will become a sinking item in our savings.

post #18 of 96

I'm still here. I'm now on my third realtor. Hopefully this means third ones a charm instead of three strikes, you're out. Can't wait to get into a house so I can get back to paying down debt instead of saving it all for the house.

post #19 of 96

Hope you are right trekking!  It is about time you got some good news.

post #20 of 96

Fingers crossed for you Trekkin!  I just finished our taxes, it will be a life saver with the way that the paydays work out for this month.  We are still chugging along trying to be super frugal & save when we can!  

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