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Dumping Debt with Dave Ramsey/DECEMBER - Page 9

post #161 of 369
Subbing...this is one of my New Year's Resolutions. Legal fees and paying for a funeral put us WAY in the hole this year.
post #162 of 369

My debt

Once we've (again) reached our emergency fund goal, currently $30/$1000, we pay off credit card debts, right?

So, does this include my auto loan, or is that something different?

I have 3 debts (not including unpaid medical bills).

They are:
1. Credit Card (used to purchase our mobile home at $11,000 in 2005).
Current Balance is $4,398.68 (before interest)at a fixed interest rate of 3.9%
The minimum monthly payment is currently $89.
I paid $100 last month, and have on occasion paid up to $250 on this one during the past two and a half years that I've carried this debt.

2. Auto Loan transferred to my credit union the summer of 2004..
This was a van I originally purchased while single and childless for $17,999.00 in April 2004 with $1000 cash down (I would have only received $500 to trade in my Saturn, which I ended up selling for $500).
Current Balance is $8,741.06 at a fixed interest rate of 5.9%
The minimum monthly payments are $272.63
I've paid up to $500 when I was working. Since I've been a SAHM (May 2005) I usually pay between $275 and $300,. Since my husband changed jobs (November and December payments) I have just paid what is due.

3. Credit Card (put my husband's bills on MBNA to get bill collectors off our butts and to stop garnishing his wages, fixed for a year at 0%, then just transferred the balance to AT&T card for 6 months at 0% interest, then back to BofA card).
Current Balance: $8,501.07 at a temporary 3.9% interest, which remains in effect through the statement date of July 2008. Each time I've transferred I've paid 3% of the balance in a transfer fee, so I don't know that it did anything for me this last time that I transferred, since it now is charging an interest. I really don't know what to do other than keep transferring for years until it's paid off.
The minimum monthly payment is $112.
I've pretty much just paid the minimum on this one.
It started at $10,000 two years ago, but since this is my husband's debt from before I met him, I don't care to pay it off first.


So, my question is, if I have extra money (which I don't, but if I did), which one of these three bills do I pay extra on?
Which one would I pay off second?
post #163 of 369
Here is another question.
My mom and others have suggested I take my daughter's savings to pay off debt.
Currently they have $4,600.51 in a one year CD collecting interest of 5.195%.

My lowest debt is $4,398.68 at a fixed interest of 3.99%.
the minimum payment is only $89.

I'm earning more interest on that savings than I pay in interest on that debt.

So, it doesn't make sense to use that savings to pay off the debt.

So, my mom suggested using the savings to pay toward the auto loan which has the highest interest of 5.9% and highest balance of $8,501.07.

That makes more sense, but still, I would still owe $3900.56 on my auto loan, plus the two credit cards, and my daughter's wouldn't have their savings anymore, which I think would be wrong.
post #164 of 369
Everyone is doing great!! We are back down to $5/1000 due to DH's crappy commission check, but we will be back to adding to it soon!
post #165 of 369
Quote:
Originally Posted by ~Purity♥Lake~ View Post
Here is another question.
My mom and others have suggested I take my daughter's savings to pay off debt.
Currently they have $4,600.51 in a one year CD collecting interest of 5.195%.

My lowest debt is $4,398.68 at a fixed interest of 3.99%.
the minimum payment is only $89.

I'm earning more interest on that savings than I pay in interest on that debt.

So, it doesn't make sense to use that savings to pay off the debt.

So, my mom suggested using the savings to pay toward the auto loan which has the highest interest of 5.9% and highest balance of $8,501.07.

That makes more sense, but still, I would still owe $3900.56 on my auto loan, plus the two credit cards, and my daughter's wouldn't have their savings anymore, which I think would be wrong.
They wouldn't have any savings, but they would be enjoying the benefit of a mother who is less stressed, and a household that is dumping debt.

I would put the CD money on the smallest debt first. If you had been doing the math right to begin with, you probably wouldn't have gotten into debt, right?

I can say that 'cause I'm guilty, too.
post #166 of 369
Quote:
Originally Posted by llamalluv View Post
If you had been doing the math right to begin with, you probably wouldn't have gotten into debt, right?

I can say that 'cause I'm guilty, too.
I bought the van before I had kids or this husband, I was single.
It was fine at that time.

I bought the house because it was our only choice besides being homeless when Abigail was 6 weeks old.

The other debt, (third credit card) my husband accrued before I even knew him, and if I had to do it all over again, I wouldn't have paid off that part of his debt (there is still more) on my credit card.

The first two choices I don't regret, the third I do.

Either way, I'd have still had some debt.

I only heard of the Dave Ramsey thing a couple months ago through MDC.
post #167 of 369
This has me thinking... should we cash in our retirement funds to pay down debt? I hesitate to do this for two reasons: we will have no retirement, we will have no way to pay our bills in an emergency.
post #168 of 369
Quote:
Originally Posted by llamalluv View Post
I would put the CD money on the smallest debt first.
They wouldn't have any savings, but they would be enjoying the benefit of a mother who is less stressed, and a household that is dumping debt.
Well, I would still be stressed because I'd still have two large debts, and my daughter's would have no savings, so I think I'd actually be more stressed.
post #169 of 369
Quote:
Originally Posted by SugarAndSun View Post
This has me thinking... should we cash in our retirement funds to pay down debt? I hesitate to do this for two reasons: we will have no retirement, we will have no way to pay our bills in an emergency.
I've wondered that, and decided against it.
I have $4,120 in an IRA which would of course be taxed upon withdrawal, if I withdrew it. I earned that IRA from '97-'98 and it is all I have toward retirement. I am already 33 and a SAHM so do not expect to see anything added anytime soon.

Maybe I am approaching this all wrong.

My mom said she would advise me to use my daughter's savings to pay off the debt, but wouldn't recommend taking out of my IRA.
She said she would only recommend using my daughter's savings simply because she KNOWS how good I am at saving and wouldn't recommend that to someone who didn't know how to save.
post #170 of 369
Quote:
Originally Posted by ~Purity♥Lake~ View Post
I bought the van before I had kids or this husband, I was single.
It was fine at that time.

I bought the house because it was our only choice besides being homeless when Abigail was 6 weeks old.

The other debt, (third credit card) my husband accrued before I even knew him, and if I had to do it all over again, I wouldn't have paid off that part of his debt (there is still more) on my credit card.

The first two choices I don't regret, the third I do.

Either way, I'd have still had some debt.

I only heard of the Dave Ramsey thing a couple months ago through MDC.
My poor husband only had 1 debt (his truck) and he married a woman with debt of, oh, about 3 times what he owed. We are 1 year into the program, and about halfway done with our debt.

I know that Dave would tell you to take the girls' money and work the debt snowball, and go back later and replace the savings, but if that won't bring you any peace, don't do that.

ETA: Don't touch any retirement savings. You should never take anything out of a 401(k) or an IRA unless it is the ONLY way to avoid a foreclosure or bankruptcy.
post #171 of 369
Quote:
Originally Posted by llamalluv View Post
My poor husband only had 1 debt (his truck) and he married a woman with debt of, oh, about 3 times what he owed. We are 1 year into the program, and about halfway done with our debt.
My husband's debt collector's actually came after him because his debt was shared with his ex, she filed bankruptcy so she wouldn't have to pay any of it, so they came after him for the amounts in full, even though technically they both should pay their half. And besides, it was all stuff that she kept and currently owns or sold for the money.


Quote:
Originally Posted by llamalluv View Post
ETA: Don't touch any retirement savings. You should never take anything out of a 401(k) or an IRA unless it is the ONLY way to avoid a foreclosure or bankruptcy.
This is good to know.
I hope I never file bankruptcy or have to deal with a foreclosure.
We actually don't have to worry about our mobile home being foreclosed on since I own it outright and never financed it through a bank.
post #172 of 369
BEF = $332.13/1000. This is a big deal b/c it's not only hard to hold on to at this time of year, but I also have to pay for a class soon. I was going to just pay for it and start taking it now, but decided to wait and save toward it specifically. That will put off the resulting training and skills, but it can wait.
post #173 of 369
Quote:
Originally Posted by ReikiMommy07 View Post
BEF = $332.13/1000. This is a big deal
post #174 of 369
Quote:
Originally Posted by DesireeH View Post
Barb, I'm sorry about the news about the tumor. Hugs mama.

With Vonage, you have to have high speed internet already (DSL/cable). It might not be a savings if you'd have to ADD high speed but if you already have it.........

Speaking of DSL/cable...I have time warner and its $40 something a month. I have to have fast though...I'm a photographer and I upload clients pic to their individual galleries which would take FOREVER...not to mention the ordering process of the prints would take forever. I get to use it as a write off but still....I wonder if there is a cheaper DSL/cable company.
We're paying $14.99 for Verizon DSL (we have Verizon land line too) for a year. When the year is up, if we don't like whatever the price increase is, we'll switch to another introductory offer, and so on. Maybe you can find something similar.
post #175 of 369
Quote:
Originally Posted by dealic View Post
LOC IS PAID OFF!!!!!!! We are debt free, except for the car! I can begin stockpiling money now!
Congrats!

Barb, ! Healing energies on the way to you... Stay strong mama! I'm so sorry you're going through this.
post #176 of 369
I am so excited to join this group! DH and I have been using the envelope cash system and working our budget this month and it is going so well. We have MUCH debt, but the plan I have in place will have us debt free except for our home in 4 years.
We are on BS1 - 767.17/1000 in the EF. Should be done in Feb.
Medical Bills $400 will be payed off in March.
Car $7K will be payed off in 09.
CC $10K will be payed off in 10.
And Student Loan $18K will be payed off in 11.

And we've paid cash for Christmas!

Thanks for the encouragement and tips.
post #177 of 369

Been with Dave for over a year now...

I found about Dave Ramsey here at MDC. Back in Oct of 2006 it was just a mention on a thread in the Frugality and Finances. I'm excited to see how it has grown so much. We were pretty good with our money but always needed to cash out investments every other year to catch up. In Oct 2006 we had just over $2000 in CC debt. Our cars we paid cash for, we paid for college with cash and scholarships. We were never on a sucessful budget and just could not figure out a 'system' that worked. We already had $1000 in the bank so that was set. It took two months to pay the CC off and canceled the two cards that we had. I cashed out my last investment of $10000 and we had our emergency fund funded! I was super excited!!! In January of 2007 we contacted one of Dave's ELP for investments. Very friendly, came to our home and talked with us about our wants and needs. He then took that information and then came back to our home with suggestions. He felt the suggestions with us and gave us time to look it over and ask questions. When we were ready he came again and we started up my DH Roth IRA. DH also has mandatory pension contribution at the school he teaches so we put about %5 in the Roth and the %10 is in the pension. So, for almost a year now we have been putting our %15 towards retirement. Then our next step, which we are still on, is saving for our three boys Bar Mitzvas. (I want to save $21000) I had sent Dave an email asking where this would fit into the baby steps. Before college. We do a written budge each month. We have a regular income from my dh teaching job and I have been doing some work. I was doing mystery shopping pretty heavy last winter, spring and summer. I got a part time job at the local grocery store. We were budgeting at least $100 from mystery shopping up until Sept 2007. Then dh got his little annual raise and we decided that we did not need the mystery shopping money in the budget. Anything I make there is now 'extra'. We budget $400 a month from my grocery store job. We figure that out from getting $100 a week (about 15 hours). Anything I make above that goes into the 'extra'. Our 'extra' is our irregular income. We have a second sheet behind our budge where we list our 'extras'. Right now Bar Mitzva $200 is at the top. Our regular budget is not able to sustain all we want to they go on to the 'extra' list. Items that go there regular are: Alcohol, eating out, vacation, Bar Mitzvah, Chiro, car repair, gifts and extra food budget money. We do our own envelope system. I have a basket that holds business size envelopes and we label them with our MANY catagories. We probably have about three dozen different envelopes with cash in them. We do sink funds for many of the catagories. I have an envelope in the front for the cash that funds everyone. In my purse right now I have the grocery and toliteries envelopes. I'm going to work today from 10:30 to 4:30 and will get whole wheat crackers and yogurt from the grocery fund and deoderant from the toiletries fund.

So, thank you all for joining in and reading about my journey.

Be well,
post #178 of 369
Purity Lake,

If you had extra money, you would put as much as you could towards your smallest debt (while making normal payments on the others) until you kill that debt off.

With regard to savings, I would leave the kids' savings where it is and just not add to it until the debt is gone. I would feel like it weren't really my money to take unless there were an emergency.
post #179 of 369
Take this for what it's worth.

Dh is 57, I'm 49. He's going to retire in just under 3 years.

We've been in debt before, climbed out, neglected to make an emergency fund, ever, and have always fallen back in. This was all before I'd ever heard of ole Dave Ramsey.

If we had taken dh annuity, we'd be facing a pretty slim retirement. Instead, we considered that money to be untouchable...ooops, except when I first met him, we misunderstodd the terms of our land loan and didn't have the down payment. We took that from his account. That was 22 years ago, and was about $1200 I think. He's a union roofer and we were sure we'd make it back since it comes out automatically.

Because we left it alone, we'll be able to pay off some things and travel throughout our retirement, without scrimping. (We live simply, and will still work at our farm for a number of years, which helps.)


I'd keep the kids money and then if they wanted someday to go to camp, or to take up ice skating or something else I couldn't afford, I'd feel completely fine about taking that money from there. I'd simply consider it sacred, untouchable, unless the kids needed it.







So, we've had out 2nd major snowstorm of the week.:...$30 for the plow which is a necessity, or my dh will shovel himself to death. One plow I could afford, todays was just one to many, and I had to take the $30 out of the EF. Bummer. However, I'm still stripping old copper wire and I think I'll be able to put it back out of that. not for another week or two though.

After the holidays I need some help listing things on ebay and getting them to sell. I'm really looking for stuff and havve found some.

We're all doing great to have saved ANYTHING this month!!!
post #180 of 369
Quote:
Originally Posted by Red View Post
I'd keep the kids money and then if they wanted someday to go to camp, or to take up ice skating or something else I couldn't afford, I'd feel completely fine about taking that money from there. I'd simply consider it sacred, untouchable, unless the kids needed it.

Red, I totally agree! That way if the kids need it, it is there for them!
and I also agree that it is amazing than any of us were able to save anything this month! Man it is tough this month!! Especually when you are totally unprepared for Christmas (like me) We weren't able to save much, but at least it was something! (now we just have to keep it there!)
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