Dumping Debt and Building Wealth with Dave Ramsey- July

[phathui5]

Welcome to a new month ladies! This thread is for anyone who is following the Baby Steps outlined in the book The Total Money Makeover by Dave Ramsey. New people are welcomed to join us on our journey to financial peace.

These are the Baby Steps:

BS1 $1,000 to start an Emergency Fund
BS2 Pay off all debt using the Debt Snowball
BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax 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:

www.daveramsey.com

You can do a lot of things on the site, including listening to his radio show.

Here's my intro: My name's Liz. I'm a homeschooling mom to four who also does part-time childcare from home. My dh works full-time outside of the home. We started the Dave Ramsey plan back in October and are currently working through Step 2.

Here's where we're at:
BS1: DONE!!
BS2:
$466 Capital One- killed!!!
$614 Van loan - killed!!!
$1091 Best Buy- killed!!!
$1770 Midwife- paid off!!!
$2184 HSBC Retail Services- killed!!!
$4249.63 Needed to get out of Truck loan- sitting in savings until we decide whether to sell it or keep it
BS3: 30000/20000
BS4: 4% at present
BS5: Not started
BS6: 2 years into our 30 year mortgage. Can't wait to kill this.
BS7: One day baby, one day.

Let's get a roll call for the month with where everyone is on the Baby Steps.

Feel free to post any questions you may have about the Dave Ramsey plan.

p1gg1e
BS1 - $2000 ( though this money will be put towards the 401K)
BS2 cc- $6000
401 k pay back - $4000
car loan 9000
handyman bill for old house $1100

rosegirl
BS1- done!!!
BS2- wrote the check last night to pay my car off (had 2 payments left)
I have a school loan, and we have 10K of credit card. Hoping to pay some on this when I get my quarterly bonus at work.
BS3-6 not started- focusing on bs2. although we do have 401K matches at work (we can only change this at open enrollment in spring and by next spring we won't want to stop contributing)

MamaVolpe
BS1 $1,000 to start an Emergency Fund: Check!
BS2 Pay off all debt using the Debt Snowball: Working on School Debt and CC Debt and Home Improvement Debt
BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement: Going at 10% Now!
BS5 College funding for children Got $500 from family to start one up with!
BS6 Pay off home early
BS7 Build wealth and give! Invest in mutual funds and real estate

thenaturefreak
almost done with BS1 and will be ready to start BS2 soon

OhMel
BS1

shanetedisaac
0-- Get current on bills - n/a
1 -- $1,000 to start an Emergency Fund done
2 -- Pay off all debt using the Debt Snowball done
3 -- Three to six months of expenses in savings done
4 -- Invest 15 percent of household income into Roth IRAs and pre-tax retirement - Required pension contribution at dh job, the remainder in a Roth IRA 15% total
4.5 Bar Mitzvah funding saving up to $8956/$21,000 (One boy done!)
5 -- College funding for children after the Bar Mitzvah's are funded - Some current funding by relative gifts. Currently:
Theodore: $5179
Issac: $3741
Harrison: $2898
6 -- Pay off home early I so can't wait to be here! - On year 4 of a 15 year fixed note $90,000 to go
7 -- Build wealth and give! --- Invest in mutual funds and real estate To be able to share will be a bessing.

mtm
BS1 $1,000 to start an Emergency Fund, done

BS2 Pay off all debt using the Debt Snowball, paid off my cc, working on dh's, owe about 5000. By current rate of repayment, should be done by Christmas!

llamalluv
July 1 Debt Numbers:
Mastercard 2...4916.35
Student Ln 1...3087.49
Student Ln 2...6843.48
Auto Loan.....10537.92
----------------------
Balance......$25385.24

Jilian
BS1: done!
BS2: pay off cc $2,000
student loan 1 $800
student loan 2 $3,000
student loan 3 $6,000
student loan 4 $32,000 (currently deferred)
car loan $11,000 (down from $20,000 after the trade)
BS3: We have a little more than the $1,000 EF but will get there when we finish snowballing
BS4: We are currently doing 10% to get DH's company match of 6%, so we're getting 16% put into 401k
BS5: Opened savings accounts for both boys this week, they each have $100
BS6: We had to get rid of our home, so no home to pay off early yet
BS7: One day!

FeelingBlessed
BS0 - Get current on bills - N/A
BS1 - $1,000 EF - need to transfer to proper account
BS2 - Pay off all debt - working on this (see below)
BS3 - 3-4 mo. expenses in savings (not yet...)
BS4 - Invest 15% (not currently adding to existing retirement savings)
BS5 - College funding (both kids have 529s funded with gifts; not currently adding to the savings)
BS6 - Pay off home early
BS7 - Build wealth + give - invest in mutual funds + real estate (we are a little backwards here - own 3 rental properties right now; will be selling one this summer; also have existing retirement accounts from pre-snowball)

smokeylo
BS 1 --> DONE! and current on all bills
BS 2-->
$4000 on car loan
$7000 Discover
$26000 Student Loan 1
$44000 Student Loan 2

lilyka
BS1 $1,000 to start an Emergency Fund - done
BS2 Pay off all debt using the Debt Snowball - done (almost done . . .I put about $300 on my credit card but can pay it off from my emergency fund and still have the $1000 in it.)
BS3 Three to six months of expenses in savings - working on it

mamimapster
BS 0-done
BS 1-400/1000
BS 2-HBSC Cc-308 left
Elan Cc-2400
Working Assets Cc-3700
Citi-7800
Student Loan ( Pie in the Sky!!)
BS 3- 3-6 mos of savings-so not there!!
Bs 4-ditto
Bs 5-Ditto

mama2naomi
BS1 $1,000 to start an Emergency Fund - DONE
BS2 Pay off all debt using the Debt Snowball - DONE (not including the student loan which is locked at 2.5%)
BS3 Three to six months of expenses in savings - Working on it: $2000/$9000
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement - DONE
BS5 College funding for children - DONE
BS6 Pay off home early - Working on it
BS7 Build wealth and give! Invest in mutual funds and real estate - Not yet

lunamama
BS1 $1,000 to start an Emergency Fund done!
BS2 Pay off all debt using the Debt Snowball paid 1353.95 today yay
BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement
BS5 College funding for children
BS6 Pay off home early
BS7 Build wealth and give! Invest in mutual funds and real estate

[p1gg1e]

Subbing!!

Elizabeth SAHM to 2 girls. Ive been lurking off and on here on the threads for a few months now. We just sold our house to start over again. Feeling good about it as our bills are now 1/3 of what we were paying ..plus we are closer to family.

BS1 - $2000 ( though this money will be put towards the 401K)
BS2 cc- $6000
401 k pay back - $4000
car loan 9000
handyman bill for old house $1100

BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement
BS5 Buy a home and pay off early
BS6 Build wealth and give! Invest in mutual funds and real estate

Kids are right now going to take loans that we will pay if they graduate

[rosegirl]

I'm joining!!! We just read TMM- and are excited. I woh right now, and we are hoping that in 12-18m I can cut back to part-time or quit!! (I am the breadwinner- so we are also praying that dh finds a slightly better job)

BS1- done!!!
BS2- wrote the check last night to pay my car off (had 2 payments left):
I have a school loan, and we have 10K of credit card. Hoping to pay some on this when I get my quarterly bonus at work.
BS3-6 not started- focusing on bs2. although we do have 401K matches at work (we can only change this at open enrollment in spring and by next spring we won't want to stop contributing)

I will update when I figure out how much of the CC we are paying off. my school loan is right at 8k- but has a lower interest rate- so we are paying the cc first.

I'm excited- and can't wait to cheer everyone on!!!!!!!!

WE CAN DO THIS!!!!!!!!!!!!!!!!!!!!!!!

[Surfacing]

continued subbing for inspiration :

[MamaVolpe]

I am just starting this month so I haven't gotten to far yet. Also I am on FMLA leave and don't start getting a pay check again until next month. Right now I am living on the nice government check I got in May. That will help me last thru the end of my FMLA leave.

BS1 $1,000 to start an Emergency Fund: : Check!
BS2 Pay off all debt using the Debt Snowball: Working on School Debt and CC Debt and Home Improvement Debt
BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement: Going at 10% Now!
BS5 College funding for children Got $500 from family to start one up with!
BS6 Pay off home early
BS7 Build wealth and give! Invest in mutual funds and real estate

[Jilian]

Subbing, will be back later to update our progress

[MyTwoAs]

Another sub

[thenaturefreak]

We are almost done with BS1 and will be ready to start BS2 soon. We just got a job offer and if we take it, we can live with my IL's for as long as we want to and be able to at least double our snowball while we are there.

[OhMel]

Hello! I just read the book and had BS1 done until I needed to fix my car. So, that's where we're back to this month. In the meantime I paid off 1 cc (also was all car) and have set aside the money to pay the midwife this month. We should start paying off our other two ccs in September and then move on to car and motorcycle loans in the beginning of 09.

Anyone have any hints on how to get out of a car that your over/under or whatever it's called when you owe more than it's worth? My only idea has been to sell the car and take whatever we get for it and buy something used and then continue paying our loan for its remainder.

[lauriem33]

subbing

June did not go so well, had to use some of the EF for stuff so I'm hoping to get it back up soon. I'll update later.

[lalaland42]

Subbing and working on BS2.

Originally Posted by OhMel

Hello! I just read the book and had BS1 done until I needed to fix my car. So, that's where we're back to this month. In the meantime I paid off 1 cc (also was all car) and have set aside the money to pay the midwife this month. We should start paying off our other two ccs in September and then move on to car and motorcycle loans in the beginning of 09.

Anyone have any hints on how to get out of a car that your over/under or whatever it's called when you owe more than it's worth? My only idea has been to sell the car and take whatever we get for it and buy something used and then continue paying our loan for its remainder.

I don't think your bank will allow you to sell your car if you can't pay in full right away. That would be turning a secured debt into an unsecured one. How much will you lose? Other than saving up the money or getting an unsecured loan to pay off the balance I am not sure what to do. Maybe other people will have good ideas?

[phathui5]

Originally Posted by rosegirl

I'm joining!!! We just read TMM- and are excited. I woh right now, and we are hoping that in 12-18m I can cut back to part-time or quit!! (I am the breadwinner- so we are also praying that dh finds a slightly better job)

BS1- done!!!
BS2- wrote the check last night to pay my car off (had 2 payments left):
I have a school loan, and we have 10K of credit card. Hoping to pay some on this when I get my quarterly bonus at work.
BS3-6 not started- focusing on bs2. although we do have 401K matches at work (we can only change this at open enrollment in spring and by next spring we won't want to stop contributing)

I will update when I figure out how much of the CC we are paying off. my school loan is right at 8k- but has a lower interest rate- so we are paying the cc first.

I'm excited- and can't wait to cheer everyone on!!!!!!!!

WE CAN DO THIS!!!!!!!!!!!!!!!!!!!!!!!

You're doing exactly what you should be. Steps 3-6 are supposed to wait until step 2 is done. Get everything but the house paid off and then you're ready to move on.

[shanetedissac]

Hello, I'm Shane and we have been debt free for over a year now. We are on baby step #4.5 our boys bar mitzvah's. In June we put $1653 towards the bar mitzvah's yea!

shanetedisaac
Shane in CT:
0-- Get current on bills - n/a
1 -- $1,000 to start an Emergency Fund done
2 -- Pay off all debt using the Debt Snowball done
3 -- Three to six months of expenses in savings done
4 -- Invest 15 percent of household income into Roth IRAs and pre-tax retirement - Required pension contribution at dh job, the remainder in a Roth IRA 15% total
4.5 Bar Mitzvah funding saving up to $8956/$21,000 (One boy done!)
5 -- College funding for children after the Bar Mitzvah's are funded - Some current funding by relative gifts. Currently:
Theodore: $5179
Issac: $3741
Harrison: $2898
6 -- Pay off home early I so can't wait to be here! - On year 4 of a 15 year fixed note $90,000 to go
7 -- Build wealth and give! --- Invest in mutual funds and real estate To be able to share will be a bessing.

July is going to be a tough month for us. It is tax month. Property taxes and car taxes are due by Aug 1. We did not put enough aside each month so are short about $400. I have posted our skimpy budget below. LOL

Life Ins. 34
Retirement fund: 175
Religious fund: 350 (this covers annual dues and religious school)
Mortgage: 771.72
Real Estate Tax: 1000 (this is super high due to lack in the envelope)
Umbrella Ins: 27
electricity: 119.26
Oil: 250
Phone: 89.56
Trash: 7.00
computer: 71.41
Groceries: 369
Gas: 240
Insurance for cars: 141
Net Flix subscription: 8.00

Any money that we make over the planned budget of $3718.00 will go to our extras list. Mark will be getting a 3rd paycheck the end of Aug. We will put that with our $2100 tax stimulus check and get Theodore his orthodontics. he needs spreaders on the top and bottom.

Be well,

[rosegirl]

shane- you are an inspiration!!!

[mtm]

Hi, I'm Michelle, mom to 3 kids. I took 2 months off from my part-time job (building superintendent) and am just getting back into the debt snowball again. We did okay for June, lots of family in town to see new babe so more eating out than I would have liked. here's to July being good for all of us!

We're a year into repayment now and its definitely harder when the rewards seem so far off.

BS1 $1,000 to start an Emergency Fund, done

BS2 Pay off all debt using the Debt Snowball, paid off my cc, working on dh's, owe about 5000. By current rate of repayment, should be done by Christmas!

[llamalluv]

OMG! It's JULY!!!!! :

We made an absolutely pathetic progress of $513.96 in the month of June.

We would have made more progress, but we had a medical bill of almost $600, and hubby had almost no OT, AND, well....we just didn't try very hard.

July 1 Debt Numbers:
Mastercard 2...4916.35
Student Ln 1...3087.49
Student Ln 2...6843.48
Auto Loan.....10537.92
----------------------
Balance......$25385.24


Goal for July: minimums on everything ($585) plus $1500 on the Mastercard to bring it down to $3300

[crazyeight]

well llama you did way better than us! i think it was only $200 saved last month. this month is going to be less than zero (i.e. using money). the only real emergency is my speeding ticket school ($100). but things are just...grim. i am not in a "i can do this place". i am wondering if i should/could get a job. there just isn't enough room in the budget to snowball consistently.

[llamalluv]

Originally Posted by dhinderliter

well llama you did way better than us! i think it was only $200 saved last month. this month is going to be less than zero (i.e. using money). the only real emergency is my speeding ticket school ($100). but things are just...grim. i am not in a "i can do this place". i am wondering if i should/could get a job. there just isn't enough room in the budget to snowball consistently.

Who would care for your children, though? If I had kids, I would not be working right now. I only earn $240/week ($205 after taxes) and childcare costs would eat that up.

Unless you can provide childcare from your home....

[PatchyMama]

I really need to be part of this thread. I have the book but haven't been able to read it yet

[jennlindsey]

I need to get in on this, too! We have BS1 done, but man oh man, we need to work on #2. It's so hard to do on one income when your housing costs are high ... I am amazed at how y'all do it!