Dumping Debt with Dave Ramsey/FPU Club

[rosie_plus_one]

I see so many people on this forum mentioning Dave Ramsey and how they are doing his baby steps. I thought maybe a thread for people in the process would be nice; we can ask questions, hold each other accountable, brag about successes, etc.

Maybe anyone interested can do a brief introduction, and mention where they are at on his plan. I'll start -

I am enrolled in FPU, class three is this Wednesday, which I won't be able to attend but DP will be able to. We are in major financial trouble right now. We had some legal stuff come up that cost about $2,000, with a possibility for more costs in a few weeks. At the same time, we had some car issues to the tune of $1000. Fortunately, DP got an accident settlement check that we disbursed to a few key people but we still have a lot of digging out to do.

We have $500 in our emergency fund and we're plugging away on it. We are having a very difficult time establishing a clear budget because DP is working a filler job at a restaurant that is just barely covering rent, let alone all the other bills.

Looking forward to getting WEIRD with some of you!

[Denvergirlie]

Here is a great board that is only dave, it might give you more of that gazelle focus in getting rid of that debt!

http://www.llnoe.com/
Living like no one else

There are forums for each of the step including a pre-baby step1 which sounds as if that might be more your speed at the moment if you need to get current on bills.

As for us, we are in baby step 2 and it's going gang busters! Will be debt free by July 2008! - That will be about 30K gone in about 18 months (knock on wood)

Just remember, it's a process and you didn't get this way overnight, so your not going to get out of it overnight.

Best of luck to you!

[mtm]

We've got our emergency fund and have paid off $4000 in debt over the past year. More important we don't add to our debt anymore. We'll be another year to 18 months paying off the rest of our credit card debt but it sure feels good to see it going down.

[Aufilia]

We already have BS1, and BS3 (which I refuse to dump in pursuit of BS2, because I'm the primary breadwinner and we're going to TTC next year, and unpaid maternity leave after that -- so I think that qualifies for the "Storm Cloud on the Horizon" clause). So we are working on BS2 by dumping a small part of our savings and all available income. I'm not sure when we'll pay off everything because I haven't finalized a few things in my mind, like is DD's college fund DS2 or DS4?

[phathui5]

We're working on getting current with out past due bills and doing BS1 at the same time. Most of our debt payments are overdue because we got tripped up paying for dh's car. What happened was that in February, dh's work switched from giving him a car payment to providing company cars. We were already in a car loan we couldn't afford to get out of (owed more than it was worth) and making the payment messed up our budget. Now dh has taken a weekend job to pay it off, so we're working on getting caught up.

[Evansmama]

MY DH just bought the book today. We are going to do a budget this weekend and hopefully ge thte book read. I will update as we progress. WE could also do a mentorship type thing. IE: people who have completed several steps could mentor people who are just starting? Just a thought....

[Sara Badger]

I love this thread we are waiting on the book and then we will be jumping in! We are currently 10,000 debted to dentist bills and 7000 to a car and misc. Right now we are one paycheck behind and have been for all of 2007 so we are so looking forward to being a step ahead! We are also moving to a better cost of living in a couple months!!

[alleyoop]

We have been working on paying down debt since January and have paid off an enormous amount of $ in back taxes, property taxes, estimated taxes, and credit cards. We have about $2,500 left on the last credit card (should be done by December) and are current on all the taxes. We are hoping that we will go into next year not owing any taxes and we are not using credit cards anymore. We still have a truck loan that we will get to next year. We have an $1,100 emergency fund that I would like to build up to at least $2,000.

August was a month off - we went camping for two weeks and I barely paid down debt but it was all planned and we didn't spend any more money than we had. September has been good and it is a nice feeling to be back in debt- paying mode. I really want to get our family in a good financial place and I hope by the end of this year we will be well on our way.

One thing I did that really helped me was set up the budget forms as a spreadsheet on Excel. Every month I budget out the money and allocate accordingly when bill paying time rolls around. If I feel like buying something, it is very apparent if I have the extra money or not.

[Miasmamma]

We just did a brief overview of Dave's book at church last Wednesday, and hopefully in Jan we will start a FPU. I hope to have our Emergency Fund completely funded by then, and hopefully one or two cards paid off by then. We do have most of our CC debt put into a plan with Consumer Credit Counseling, but once we pay off the little stuff, I can add that to the payment that I pay them every month and that will work that down super fast. Then I just need to start on my student loans. I am not looking forward to that.

[beansmama]

We are huge TMMO fans in this house.

We are debt free, have a 6 month emergency fund - and right now we are working on baby step 3b (i think that's it???) saving up for a house! We plan on building on my parents lot and we'll need at least $85k for purchasing the land/materials/etc. My dads a contractor and builds houses for a living, so we are going to do the whole thing ourselves - so it may actually be cheaper!

I love Dave!!! If it wasn't for the TMMO we'd be *screwed* right now...Dh lost his job in april and we went from making 40K/a year (although that was a VERY recent raise) to less than $16k/year on unemployment insurance.

Since we have our emergency fund and some extra house money in place DH is able to not work and instead go back to school (atleast for this year - he may need a part time job next year).

Dave rocks!

[angela1435]

Hi! I just read the book. We are in WAY over our heads. We are behind on bills, have a bounced check that we need to pay and not enough money to do it all. Blahhhhhhhh.........quick question. Ok, the first step is the emergency fund...........should i pay off things like a bounced chech from 6 months ago, old accounts in collections, things like that before or after that? Should it be included in the debt snowball? I am confused about that part.

[Miasmamma]

Your pre-baby step should be to get current on your bills and do a budget. Then get your emergency fund, then start your snowball. I went to www.llnoe.com and got some great tips. I know that I was getting frustrated b/c I wanted to start paying stuff right away, but you really can't do that unless you have a budget in place. And you need that emergency fund b/c something will happen and falling back on cc's is a huge step back.

[rosie_plus_one]

Well it sounds like there are quite a few of us working his plan right now! Great!

Pre Baby Step 1

pathui5
evansmama
Sara Badger
angela1435

Baby Step 1

rosie_plus_one (500/1000)
Miasmamma
Nitenites

Baby Step 2

Denvergirlie 30K by July 2008
mtm 4K to date, 12-18 months left
aufilia (BS3 completed - TTC)
allepoop 2500 CC to go!
excitedtobeamom

Baby Step 3

beansmama saving for house building!

[rosie_plus_one]

Please let me know if I didn't get anyone in the right spot. Now we can all try to move up the steps!

We got a paycheck yesterday that was quite a bit more than expected, so that's great news! We'll definitely be in the clear for getting everything paid this month without having to dip into that $500 in savings. DP got hired for a full time job, so I'm hoping to start putting his restaurant money into savings. I also got offered a child care position for a weekly NA meeting, so I jumped on it! Should add up to $100 extra each month. Chuggin' along, can't wait to get those CC balances down!!

[Denvergirlie]

Originally Posted by angela1435

Ok, the first step is the emergency fund...........should i pay off things like a bounced chech from 6 months ago, old accounts in collections, things like that before or after that? Should it be included in the debt snowball? I am confused about that part.

I would consider these debts, one to be placed into the debt snowball. The things you want to get current are monthly revolving debts... water, gas, electric, mortage/ rent, credit cards, car loans, etc. Anything that is still "open" and hasn't been closed, those you get current. The get that EF in place and then snowball, snowball, snowball.

Best of luck to you!

[Nitenites]

Add me in! We're in baby step one - just read the book this weekend.

[excitedtobeamom]

We are in BS2 and chugging along. Good luck everyone!

[phathui5]

Dh has been interviewing for an commercial lighting/ energy auditor job that would increase our income considerably. Obviously this would make paying off debt easier.

:

[phathui5]

What exactly is Pre-baby step 1?

[LEAW]

BS1 is saving an emergency fund of $1000.

Before you can do this, you need to be current on your bills (leave sleepers alone, but you need to have your regular bills up to date - not being behind on the utilities and such) and set up a budget that names every dollar earned so that you have something to stick to.

That's pre-BS1.

Erin, you need to put college savings for the kids in BS5.

I'm on BS2, we have one credit card and a student loan to go!