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Dumping Debt and building wealth with Dave Ramsey JANUARY - Page 3

post #41 of 585
We are about to pay off some credit cards in full. I would love to know about this also. Thanks!
post #42 of 585
I wouldn't feel bad about it - if they are willing to settle for less, it's on them. You are right, they are making money hand over fist with interest rates, late fees, membership fees, etc. If they are willing to settle for less, they're only doing it because they know that they have made their money off of you, and because they think that they will continue to profit off of you. "Ethical" and "credit card company" don't generally fit together in the same sentence.
post #43 of 585
Quote:
Originally Posted by Nibor View Post
I started listening to the audiobook version of Total Money Makeover on Saturday and Dave said that he was paying $7/month for term life insurance. I was looking up quotes online for term life insurance and couldn't find anything that inexpensive.

Any ideas how/where he managed to find something at that rate per month?
I don't know about $7/mo., but my $250K policy is $15/mo. through USAA...
post #44 of 585
I'll jump in late here.

We're almost on BS3! I feel like I'm crawling across the finish line at the end of a marathon. Lost the gazelle intensity at some point in there...

We have a $3500 car payment at the end of this month, then $3400 to the last tiny student loan on Feb 22, 2008. That will be about $55,000 paid in two years on credit cards, two cars, and student loans. The real accomplishment has been getting down our expenses so we're living on about 1/3 of our income.

Good luck to all of you. Stopping the bad spending behavior was the hardest part. These last two years have been so enjoyable for me and DH, especially as it speeds up at the end.
post #45 of 585
Quote:
Originally Posted by dealic View Post
I think we should make a list of everyone here and what step they are on, and where they are in it. It was helpful before to know eveyone's progress.
I love that idea. Then it could be the first post on each new month thread...kind of like a DDC.
post #46 of 585
We are current, have our BEF in place, but cannot proceed until we sell our house.

BUT we DO have an offer on our house that WE have accepted, but we need to wait on our mortgage company to see if THEY will accept it- we're trying for a short sale since the market tanked. We just took out a pretty hefty loan to pay our realtor, but once we're out of here, we'll be leasing a house and saving so much since the rent will be so much lower than our mortgage, that we will finally be able to start paying off our debt via the snowball method. It shouldn't take too long after that to be debt free, provided nothing crazy happens in the meantime.

I am sooooooooooo hoping the bank accepts the offer because it is actually a really good offer and we just need to get out of the house because we cannot afford it any longer. If y'all wouldn't mind some prayers and good thoughts please, we really could use it!!

OK, now to play catch up and read through this month's thread...gonna sub too.
post #47 of 585
Quote:
Originally Posted by dachshund mom View Post
I'll jump in late here.

We're almost on BS3! I feel like I'm crawling across the finish line at the end of a marathon. Lost the gazelle intensity at some point in there...

We have a $3500 car payment at the end of this month, then $3400 to the last tiny student loan on Feb 22, 2008. That will be about $55,000 paid in two years on credit cards, two cars, and student loans. The real accomplishment has been getting down our expenses so we're living on about 1/3 of our income.

Good luck to all of you. Stopping the bad spending behavior was the hardest part. These last two years have been so enjoyable for me and DH, especially as it speeds up at the end.
Wonderful!!! Congratulations. :
post #48 of 585
I'm on BS2 (after starting my TMM 4 weeks ago!).

Just paid $180/340 on Debt #2 - medical bill. Will pay the remaining balance on Jan. 15.

I feel weird about posting my budget, too, but I probably will in the next few days. I know that there is room for cutting, and I guess I'm afraid that you all will probably point that out to me. But that's what the support thread is about, I suppose.
post #49 of 585
According to Dave, you can move large student loans to BS#6...I think it's the same rule as for 2nd mortgages...if it's over half your income.
post #50 of 585
Joining in.

Our goals for the year are to continue to snowball our debt, and increase our emergency fund. We want to have 3 months worth of gross income saved and have set a goal for that to be accomplished within 5 years. Our CC's are at a 0 balance (have been for nearly a year!) and I just paid off a medical bill this month.

We are also planning to start contributing to an IRA starting this year. I'm planning to sit down with DH when he gets home and really go over our finances & our goals & discuss changes we want to make to get there faster.
post #51 of 585
Quote:
Originally Posted by Nibor View Post
I started listening to the audiobook version of Total Money Makeover on Saturday and Dave said that he was paying $7/month for term life insurance. I was looking up quotes online for term life insurance and couldn't find anything that inexpensive.

Any ideas how/where he managed to find something at that rate per month?
I wondered the exact same thing. We have been paying $72 for supplimental coverage for me and dh (we have coverage through his job). We can expand that and only pay like $20 for similar coverage, so I'm canceling my Primerica policy.

But, yeah, found nothing remotely that low.
post #52 of 585
Oh and we are on BS#2, with $4900 left to pay on the cc.

Then we have $16,000 left on the van *sigh*.
post #53 of 585
I once called about a medical bill I was making payments on and was flat out told that if I ever had extra money, I should call them for a pay off balance, and that they would lower it if I paid it all at once. They ended up taking $50 off when I was had enough cash to pay it in full. And when you consider that you get tons of interest on the credit card, they probably are only going to take off the interest, not the amount you actually charged, so I don't feel it is an ethics concern.

Anyway, I am on BS1 right now. I am trying to add up the total in our EF at the moment, I just got paid and am about to pay bills and rolls some in to savings.
post #54 of 585
I definately need to start being more financially responsible. I am very embarassed at the amount of money above my dh's salary that we spent last year. I know better, I know how to budget but for some reason last year I went crazy and hardly looked at a bank statement. I've heard of Dave Ramsey and I'm definately interested. I guess I need to start out by tracking spending for the next three months. As far as the baby steps go...

Quote:
Originally Posted by Denvergirlie View Post
A refresher:

Dave Ramsey - Baby Steps

0-- Get current on bills Done
1 -- $1,000 to start an Emergency Fund Done
2 -- Pay off all debt using the Debt Snowball [COLOR="Indigo"] Our only debt is our car, what is the Debt Snowball? [COLOR]
3 -- Three to six months of expenses in savings Definately not done.

3.5 -- save for downpayment on house if you do not already own a house Done
4 -- Invest 15 percent of household income into Roth IRAs and pre-tax retirement We are currently putting 8% into dh's 401k but I'm guessing it is more important to pay off the car and build up our savings than to increase this to 15%?
5 -- College funding for children I wanted to open a 529 for the boys next month, per Dave Ramsey is it better to all of the above first? What about the tax benefits?
6 -- Pay off home early I don't even see this happening... What is the benefit, other than obviously not having a mortgage?

7 -- Build wealth and give! --- Invest in mutual funds and real estate
post #55 of 585
Can you only find the baby steps in the book? My SIL let me borrow a Dave Ramsey book but it's the "Peace" one not the Total Money Makeover.

If you pay off your CC's (and cancel them) with a home equity loan (23% less interest!) does it count as paying them off?

Life insurance - we can't get it. My dh has type 1 diabetes and epilepsy. It would be like $200/month! And he's in good health and only 35. It scares me to death!
post #56 of 585
Quote:
Originally Posted by shanetedissac View Post
Are you debt free? If so that is GREAT! Otherwise it needs to be listed in the budget how much you are paying to each creditor.

Be well,
Yes, I'm debt free.
post #57 of 585
Quote:
Originally Posted by ekblad9 View Post
If you pay off your CC's (and cancel them) with a home equity loan (23% less interest!) does it count as paying them off?
No! Dave doesn't want you to consolidate or refi or move debt around, because it doesn't take care of the problem. Your best bet is to attack the debt, paying off the smallest balance first, regardless of the interest rate.

Rolling the CC's into another loan doesn't mean that they are paid off - the debt is still there, it is just in a different place.
post #58 of 585
Quote:
Originally Posted by MissSJ View Post
What is the debt snowball?
The debt snowball is where you make a list of all of your debts and you aggressively pay them off. Make the payments on everything to keep all of your accounts current, and then take anything extra and throw it at the smallest debt until it is paid off. When the smallest debt is paid off, apply that monthly payment and whatever extra you have to the next smallest, and so on. As you keep going, your debt will get smaller and your "snowball" will get bigger, until finally you are free from debt!
post #59 of 585
Quote:
Originally Posted by littleaugustbaby View Post
The debt snowball is where you make a list of all of your debts and you aggressively pay them off. Make the payments on everything to keep all of your accounts current, and then take anything extra and throw it at the smallest debt until it is paid off. When the smallest debt is paid off, apply that monthly payment and whatever extra you have to the next smallest, and so on. As you keep going, your debt will get smaller and your "snowball" will get bigger, until finally you are free from debt!
Including a car payment? If only I can convince my dh that this is a great idea. We have an extra $420 a month that he is putting aside so he can buy a "toy" car, think Mustang Cobra or something like it. If I can convince him to put it toward our car payment we will pay off our new Honda in half the time and paying half the interest. Sounds like a good idea to me but dh is convinced he will NEVER get "his" car or he will get it when he is close to his 50s like his dad did, anyways that is a whole other conversation. BTW, I do want my dh to get the car he desires since I know how happy it will make him it sometimes just seems financially crazy to me.
post #60 of 585
Yep, including your car payment!

Although DR is really anti-new car. He is really big on selling newer cars and driving old beat up cars because owning a new car is essentially a waste of money. He advises never having a car payment if possible, and always paying cash for a used car rather than a brand new car (which loses all of it's value rapidly).
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