Dumping Debt and Building Wealth with Dave Ramsey- July - Page 2

[Jilian]

We made some serious progress this past month by lowering all of the bills we could lower. We downgraded from a minivan to a Civic to cut a year off our car payment and save $100/mo in payments and even more in gas. Here is where we are:

BS1: done!
BS2: student loan 1 $800
pay off cc $2,000
student loan 2 $3,000
student loan 3 $6,700
car loan $11,000 (down from $20,000 after the trade)
student loan 4 $32,000 (currently deferred)
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!

Goals for July: Pay off student loan #1 and pay another chunk towards cc debt, then snowball down the line to get rid of the rest of our debt.

[crazyeight]

Originally Posted by llamalluv

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....

i would TRY to find something during the time when dh could watch the kids. i am looking into newspaper delivery right now. i think that is the ONLY fit thats going to work. i "work" at home and do special coupon shopping plus chores PLUS time with kids so that is the only thing that wouldn't make it feel like chopping my head off.

Originally Posted by 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!

its really hard! i hear ya!

[OhMel]

Originally Posted by lalaland42

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?

Ahhhh, hadn't thought of that! Makes sense. What do people do?

[FeelingBlessed]

I am Kim, SAH, WAH, + PT WOH mama to two kiddos. DH also works and is in school full time (working on his RN). I have been a DR fan for awhile, but "officially" started the program this past February. In that short period of time, have been thrilled to see total debt numbers steadily declining. We plan to sell a rental property this summer, so that will give the snowball a big kick in the tush!

Our progress...

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)

July's goals are to sell a rental house and DH's motorcycle; should really get that snowball moving!

SNOWBALL PROGRESS...

Since the official launch of our snowball on 2/15/08:
(Our payoffs include large chunks of LT debt (before ST debt is complete) b/c it was a requirement to partially pay off a mortgage with recent land sale)

Snowball - Phase 1 (BS2/short-term): $10,939.23 PAID OFF

Snowball - Phase 2 (BS6/long-term - mortgages for 3 properties, HELOC, + grad school loan): $51,422.01 PAID OFF

TOTAL PAID OFF: $62,361.24

Snowball Goal for July: break $65,000!

Kim

[griffin2004]

I've been doing the steps for a few months. I'm seeing some progress but of course not fast enough. Doing the written budget was a real eye-opener for me and helps me keep on track.

Here's my dealio:

BS0 get bills current => done
BS1 $1,000 Emergency Fund => done
BS2 Debt Snowball => ~ $1200 on Visa that just won't go away
BS3 goal of $20,000 expenses in savings => $450 so far
BS4 Invest 15 percent into retirement => currently 12% of gross
BS5 College funding => 2 years of tuition credits purchased, buying Year 3 with monthly payment
BS6 Pay off home early => trying to figure out how to make an extra payment a year; so far, no brilliant ideas
BS7 Build wealth => small discount brokerage account; no regular contributions yet

[griffin2004]

Originally Posted by OhMel

Ahhhh, hadn't thought of that! Makes sense. What do people do?

Dave talked about this on his show last night. He said some banks will take a note for the difference between what you owe and what you sell the vehicle for and will release the title. Their other option is to repo the vehicle in which case they have no hope of getting $$ from you and would likely not get as much for the vehicle as in a private sale.

[Jilian]

Originally Posted by griffin2004

BS6 Pay off home early => trying to figure out how to make an extra payment a year; so far, no brilliant ideas

You can divide your extra payment by 12 months and just pay that amount each month with your mortgage (in a seperate check). Just make sure to note that it is to be applied towards principle, not interest. It is easier to pay a little bit extra each month than it is to come up with a whole extra payment at once.

[griffin2004]

I've tried to do that, Jilian, but I can't seem to squeeze another $125 out of the monthly budget right now. I'm getting tiny raises in July and January so maybe that will be the source. I'm 1 year into a 30-yr mortgage and would love to pay it off in 20 or less.

[tynme]

Ok, I'm taking the plunge, as I can not stand to even look at our debt any longer!!! I picked up a part time job, and the entire paycheck is going towards whichever step we are on. I work when DH is home, so we don't have any childcare expenses. I am a full time student, but this year I will get some grant money, and that will all go towards which ever step we are on also.

BS1>>>>We have about $120 to go.
BS2 >>>Ugh, I can't even stand to look at this. Including student loans (about 10k) we are right around 48k in debt. 15K in credit cards, have one bike, one boat, and a car loan. boat and bike we owe more than it's worth. 10K is student loans. Our debt is horrible, I'm so embarassed by it, but so motivated to know we are working on it. We actually paid off a $400 CC note today (the 120 for BS1 will be paid with my next check). It does feel good to know we are making SOME progress...
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 <<<Our DS has 280 in savings
BS6 Pay off home early <<<<year 1 of a 30 yr. mortgage.
BS7 Build wealth and give! Invest in mutual funds and real estate <<<We will make it here, I know we will!!!!

[shanetedissac]

Originally Posted by rosegirl

shane- you are an inspiration!!!

Thank you, ty, ty! It is very tough around here lately and I really appreciate that comment.

[rosegirl]

feelingblessed- thank you so much for sharing. it is nice to see what can be done down the road for those of us just starting!!!

[JackieR]

subbing; will post my #s later!

[MCsMom]

I managed to read the book before having to return it to the library! Lots of interesting things to think about.

I really need to make a serious budget. I am just really having a hard time with it emotionally. My DH left his civilian job and was doing consulting and some national guard stuff. He is now essentially full time National Guard, but they are getting ready to go to Iraq and his pay status is changing. So it is really difficult to budget, and I am just really upset about why it is changing in the first place. And then we are spending money on things that we 'normally' wouldn't be spending money on. And I am just kind of overwhelmed.

Anyways, I just we are working on getting a budget and not charging anything to our credit card. Which we do pay off in full every month, but we just need to stop using it in the first place. At least we do not have interest charges.

[meandk0610]

bs1 - 132.05/1000

[phathui5]

Here's a good youtube video. It's DR talking about whole vs term life insurance:

http://youtube.com/watch?v=gvjir8yxPUI

[llamalluv]

Paycheck Friday Update!


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


July 4th Numbers:
July 1 Debt Numbers:
Mastercard 2...3766.35 (-$1150!)
Student Ln 1...3067.95
Student Ln 2...6840.65
Auto Loan.....10537.92
----------------------
Balance......$24212.87

$1172.37 in debt reduction! WOOT!

What a great Independence Day!

Our goal for this month was $2000 in reduction, and we are already 60% to our goal! YAY!

[llamalluv]

Originally Posted by dhinderliter

i would TRY to find something during the time when dh could watch the kids. i am looking into newspaper delivery right now. i think that is the ONLY fit thats going to work. i "work" at home and do special coupon shopping plus chores PLUS time with kids so that is the only thing that wouldn't make it feel like chopping my head off.

Oh,

You could also TRADE child care with another mom in a similar bind.

I just read that as I was re-re-re-reading The Complete Tightwad Gazette....

[llamalluv]

Originally Posted by OhMel

Ahhhh, hadn't thought of that! Makes sense. What do people do?

When we sold DH's truck, we took out a $3,000 cash advance to cover the difference, and then immediately snowballed it. It took us about 3 months to pay off (we used OT pay and tax return $)

[Jilian]

I finally received my book-on-CD copy of financial peace and listened to almost all of it today! It makes so much sense and amazes me how stupid we've been with finances over the years. DH and I are on a serious mission right now to eliminate all of our debt over the next 2 years and be in a position to buy a home with a 15 yr mortgage. It is exciting to think that we may spend our early 30's living pretty much debt free!

[lalaland42]

We aren't going to pay off as much this money because of our $1000 car repair bill. And it looks like we need to get the timing belt done to the tune of $500. In 5 years, this is the only repair we needed so I guess the car has lasted pretty well, I just wish we didn't have to do it all at once.

BS1: Still have $1000.
BS2: Still around $30,000 in student loans, $7,000 in car loan (other car)
BS3: Waiting