Getting Out of Debt with DR, Sept 2009 - Mothering Forums

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Old 08-31-2009, 01:29 PM - Thread Starter
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Woohoo, its September! Who is in for a month of getting out of debt and getting into financial shape? Most of us use Dave Ramsey's method but please join us even if you're following someone else/your own plan. All welcome!

Here's DR's plan:

These are the Baby Steps:

Pre-Step 1: Get current on your debts and do a budget
0.1 Commit to NEVER borrow $$$ again
0.2 Talk with spouse and get him/her on the same page as you concerning finances.
0.3 Do a written budget
0.4 Temporarily stop all retirement contributions
0.5 Get current on all the basics (Shelter, Food, Utilities, Basic clothing)
0.6 Amputate "toys" (bikes, boats, ATV's etc) if they will keep you from completing the snowball within 12 months
0.7 Cut lifestyle (Cut CATV, Cellphone, Regular phone "extra's", Internet, Eating out, etc) and/or take second job if $1000 EF will take more than 30-90 days.
0.8 Get current on ALL bills

BS1 $1,000 to start an Emergency Fund
1.1 Chop up/freeze CC's (You have an EF now)
1.2 Get Health insurance NOW if in the US (chances of getting sick w/ major medical bills are larger than that of death)
1.3 Get Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died.
1.4 Amputate cars that you can't pay off within 24 months
1.5 Consider raising insurance deductables to $500 or $1000

BS2 Pay off all debt using the Debt Snowball
2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest.
2.1 You can take your first vacation since finding Dave if you can pay cash for it (no using the EF !!!)

BS3 Three to six months of expenses in savings
3.1 Start car replacement fund
3.2 Save up 20% for home purchase OR pay down existing mortgage to the point you can drop PMI.
3.3 Start furniture or other non-essential stuff replacement fund

BS4 Invest 15 percent of household income for 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

Please join in!
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Old 08-31-2009, 01:30 PM - Thread Starter
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If you need added or removed from the list, or I got your details wrong just let me know and I'll fix it.

Pre-Step 1
anstar
BelovedK
BonnieNova
dfunk98
eirual
ktg
madsommer
Miasmamma

BS#1: Save up $1000
2lilsweetfoxes
Contrariety
crunchymomof2
dex_millie
Evenstar
fairydust020409
JamieB
JenniferH
JustKiya
Kaitnbugsmom
KnittingKara
Krisis
Ksenia
Leav97
lj2blessed
mamabain
MamaPam
mommaknowsbest
neveryoumindthere
Sihaya
teenyToona
Tryingforbaby

BS#2: Pay off all Debt (except the mortgage)
100%Mom
AFwife
AllieFaye
astar326
Bluegoat
claddaghmom
ColoradoMama
Contrariety
cymbeline
excitedtobeamom
FeelingBlessed
goldfishkate
HappyMommy2
herwitsend
hollytheteacher
indie
jeliphish
jjawm
kavita
killick
laohaire
LittleBirdy
lizziebits
llamalluv
major_mama11
mamabain
mamimapster
mich
MomtoWilmo
my2girlz
Nickarolaberry
okapi
onlygirls
onthemove
Pernillep
p1gg1e
PluggingAway
RoadWorkAhead
samandhenrysmom
smallmama
stellarae
sweetjasmine
thenaturefreak
tricia80
triscuitsmom
tynme
twin_mama
whiddle

BS#3: Build up to 3-6 months of savings
akichan
annethcz
beansmama
Crunchy*VT*Mom
Denvergirlie
KailuaMamatoMaya
mammamo
maryjane
MCsMom
mtm
Nora_SEA
phatui5
phillytwinmama
Rev1053
sarafi
Stone_Fence
yasinsmama

BS#4
Softmama

BS#5

BS#6
kanga1622
rebeccalynn
Sarah8Jane
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Old 08-31-2009, 04:09 PM
 
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Yea for September!
DH and I just moved to BS3! :
We paid the last payment to the SL yesterday!
Its going to feel so good to be just transferring money to our savings account rather then be making a payment to someone else. I am so excited to actually get to keep our money now.

:::::::

Thank you to Dave Ramsey.

Mom to '97, '07, '09 and birth mom '00 and wife to my BFF
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Old 08-31-2009, 05:33 PM
 
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Congratulations Rev!

me, 28 & dh, 32.
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Old 08-31-2009, 06:36 PM
 
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Great job, rev!

I'm now at BS2. :

Need to pay off the car loan and the remaining cc. I was throwing extra at both but probably for the end of the year I'll just have to do the minimum. We're paying off this year's new medical bills, I'll be paying for my dad's plane ticket to spend Thanksgiving with us and we'll probably need to take kitty in soon to have a small lump looked at. Then of course there's the holidays with 5 stepkids and 2 grandkids.
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Old 08-31-2009, 07:00 PM - Thread Starter
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Rev and sweetjasmine, what a great way to start the month ::
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Old 08-31-2009, 07:09 PM
 
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We moved from BS 1 to BS 2! Yay! For August we saved up the $1k emergency fund, plus we also needed a $200 "buffer" fund for non-emergencies for things like paying our CSA share for the month (we "pay ourselves back" each month by reducing our grocery spending, but were not able to pay it upfront without starving ourselves, lol). So we have both now, and also have $92 left over to start the snowball for our first debt (car payment).

Homeschooling mama to 6 year old DD.

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Old 08-31-2009, 11:20 PM
 
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We are still on BS2. We started using envelopes today and I found 4 IRL friends who are doing DR. One recommended a financial planner here in town who is an ELP so I called him today. We missed each other so I will try to call him back in the morning.
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Old 09-01-2009, 01:16 AM
 
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We're still plugging away at BS1 (though we've only been there for 2 wks now, so I can hardly complain) and the end is near with a gov't grant on its way to us to help us finish it off, hooray! By the end of this month, we will hopefully have enough saved (in addition to the emergency fund) to pay cash for new shocks for the car and start our snowball a rollin'.

We've changed in quite a few ways over the last few weeks: we're not treating ourselves when extra money comes in- we're putting it to work, we're not buying things we don't absolutely need (though I did just go and buy clothes for work, but they were pretty much needed and since I haven't started working yet I stole $ from our gas budget which is over-funded this month. I got 4 outfits that I love for $50 vs a bunch of stuff I kinda liked but would never wear for $200, so I'm happy. I've also realized that if it doesn't fit now, it won't fit later. If it doesn't hang well now, it won't hang well later. If I don't love it now I won't love it later, and if I don't love it, I'm not going to wear it, so don't buy something I'm settling on or otherwise hoping it will work somehow. Those are the things that live in your closet with the tags on and just make you feel frumpy. For clothing which I rarely buy I also shifted from thinking "if I don't like it, I'll return it" to "if I get home and still feel I'll need it, I can come back for it.")

I'm amazed at how much money just drifted away before. It feels so good to be in control and to have a plan

Laurie, wife to guitar.gifDH (Aug/04), mom tobikenew.gifDS1 (Nov/05) and bfinfant.gifDS2 (June/12).

 

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Old 09-01-2009, 01:38 AM
 
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Still working on BS2. This was our SECOND month in a row of staying within our budget....a huge accomplishment for us.

We have a large water bill due this month so we don't have much extra to throw at debt, but if we can stay within budget for the third month in a row, I will consider it a success!
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Old 09-01-2009, 02:44 AM
 
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Congratulations Rev! I can't wait for that day. YOU'RE DEBT FREEEEEEE!!!!

sweetjasmine and laohaire, great job moving on to BS2!!

We're still plugging along in BS2. Paid off another (the 3rd) credit card in August. $2,775 down, $43,300 to go!
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Old 09-01-2009, 04:49 AM
 
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Someone please tell me it's not a good idea to borrow money to stay in a nice hotel for our anniversary this week. I know it isn't but...I hate to cancel the reservation. We are way behind on things this month (yes, I know it's the first!) and I am worried. Still on our way to BS1.

"For me, You have created the skies scattered with stars...and all the beautiful things on earth." ~St. Maximilian Kolbe
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Old 09-01-2009, 09:35 AM
 
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Hi all

i guess I am pre BS1, DH and I are drowning in debt, we recently came in contact with the DR materials, and think it is a really sensible program. I really want to get things in order bc it is really causing tension between DH and I I am not even sure what I owe. DH went through a foreclosure before we were married and is trying to get things in order, like me, he isn't even sure how much of a mess he is in.

I could go on about the mess we are in, but I won't right now. We are ready to pull out of it, but I am afraid that I don't have the willpower to stick with the plan. I love to shop, and we eat out. I HAVE been cooking at home though most nights lately since we decided to get a hold of this financial thing. The only thing I mainly struggle with is our 'date night', it is really important to us. I think it keeps our relationship fresh. Lately we have been doing things like riding bikes together, walking and talking, but DH and I really like to share a meal out (once a week) and I know that is a no no

Anyway, I just wanted to introduce myself and get started with this thing.

Anyone have any good ideas for out date night that are fun and don't cost $$ like movies and eating out?

                                Whatever will be, already is...
 
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Old 09-01-2009, 10:28 AM
 
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we're on to BS2. i just had surgery which added $3500 (deductible) to our debt, really we are just suspending snowball and cashflowing, which feels great. NO NEW DEBT!

but it is putting us back in our goals.

we have student loans to pay off. we're 20% done with debt.

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Old 09-01-2009, 11:13 AM
 
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We are on baby step #2. Here is our remaining (yay!) debt: Dentist: $1500, CC #1: 5,500, CC#2: 7500, Boat: 9,000, student loans 23,000.

Our struggle is we've opened up so much extra income (we could have 1500 a month easily going towards debt) that we are wanting to enjoy this extra money and do things with the kids. We have two foster kids, 8 and 12, and a 3.5 year old. It's really hard for us to stay so tight and on track. We were really struggling for a long time making ends meet, and now that we have flexibility, we aren't building debt, but we're moving really slowly. We need to get our motivation back! Also, we need 1300 for a transmission, 450 for the rest of our pellets.
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Old 09-01-2009, 11:18 AM
 
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hi folks, I'm new to this board but not to DR. currently we're on BS3 and I look fowarding to joining your group.
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Old 09-01-2009, 11:24 AM
 
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Quote:
Originally Posted by BelovedK View Post

Anyone have any good ideas for out date night that are fun and don't cost $$ like movies and eating out?
A picnic in the park or by a river? Check for cupons for bowling or a cheap $2 theatre? A bedroom retreat for backrubs with some atmosphere? A bath with some wine (or nothing but bubbles)?

I tend to think that a 'date' is more a mindset than an event per se.

Laurie, wife to guitar.gifDH (Aug/04), mom tobikenew.gifDS1 (Nov/05) and bfinfant.gifDS2 (June/12).

 

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Old 09-01-2009, 11:29 AM
 
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Originally Posted by eirual View Post
.....we're not treating ourselves when extra money comes in-.......I'm amazed at how much money just drifted away before. It feels so good to be in control and to have a plan
I totally agree, its great to have a plan! All that "extra" money makes a big difference towards debt.

Quote:
Originally Posted by The Hidden Life View Post
Someone please tell me it's not a good idea to borrow money to stay in a nice hotel for our anniversary this week. I know it isn't but...I hate to cancel the reservation. We are way behind on things this month (yes, I know it's the first!) and I am worried. Still on our way to BS1.
Its not a good idea! I wouldn't borrow money for a vacation. Cancel the reservation. Sorry.

Quote:
Originally Posted by BelovedK View Post
I love to shop, and we eat out. I HAVE been cooking at home though most nights lately since we decided to get a hold of this financial thing. ......cut...... but DH and I really like to share a meal out (once a week) and I know that is a no no
Welcome! And everyone loves to buy new things and eat out... DR isn't against enjoying yourself as long as you can afford it. If you cant pay cash for it you shouldn't be buying it.

Quote:
Originally Posted by tynme View Post
Our struggle is we've opened up so much extra income (we could have 1500 a month easily going towards debt) that we are wanting to enjoy this extra money and do things with the kids. .......... We were really struggling for a long time making ends meet, and now that we have flexibility, we aren't building debt, but we're moving really slowly. We need to get our motivation back!
Its hard to keep the motivation, but imagine how quickly you could be out of debt if your making $1,500 payments every month!
And congratulations on not building more debt!

Mom to '97, '07, '09 and birth mom '00 and wife to my BFF
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Old 09-01-2009, 11:29 AM
 
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Originally Posted by tynme View Post
We are on baby step #2. Here is our remaining (yay!) debt: Dentist: $1500, CC #1: 5,500, CC#2: 7500, Boat: 9,000, student loans 23,000.

Our struggle is we've opened up so much extra income (we could have 1500 a month easily going towards debt) that we are wanting to enjoy this extra money and do things with the kids. We have two foster kids, 8 and 12, and a 3.5 year old. It's really hard for us to stay so tight and on track. We were really struggling for a long time making ends meet, and now that we have flexibility, we aren't building debt, but we're moving really slowly. We need to get our motivation back! Also, we need 1300 for a transmission, 450 for the rest of our pellets.
Can you set a new goal to get motivated? Like $45,500 would get paid off with 31 instalments of $1,500 or in 2.6 yrs. What about aiming for being out of debt with a $7,000 vacation fund in 2 years (because you'll be snowballing, sooner if you can) to get some fire under your toosh again!

Laurie, wife to guitar.gifDH (Aug/04), mom tobikenew.gifDS1 (Nov/05) and bfinfant.gifDS2 (June/12).

 

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Old 09-01-2009, 11:31 AM
 
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Originally Posted by phillytwinmama View Post
hi folks, I'm new to this board but not to DR. currently we're on BS3 and I look fowarding to joining your group.
I recognize your name from WDF board! Welcome.

Mom to '97, '07, '09 and birth mom '00 and wife to my BFF
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Old 09-01-2009, 12:17 PM
 
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Cheaper "going out" dates could also be just going out for coffee or ice cream.

Also, look around online or your local newspaper or something to find a calendar of events. I've started doing that and find a fair amount of free events around here. For example, every summer in the next town, they do free movie nights Fridays on the town hall lawn. It's soooo much fun seeing a movie under the stars. We sometimes bake cookies to munch on while we're there, and always bring a blanket to sit on and kind of cuddle.

Homeschooling mama to 6 year old DD.

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Old 09-01-2009, 12:57 PM
 
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Thanks for the date ideas I will be on the lookout for some fun and cheap things. There is a $2 theatre around here, I guess I could endure the uncomfortable seats

I have an addiction to books I just went to the library instead of the bookstore and feel good about it, that way if I REALLY like the book and can afford it, I will get it, no more impulse purchases.

My goal is to find out exactly how much I owe so I can get to the bottom of it, I was this close to filing bankruptcy, but read in the DR book about how damaging it is, so I am going to try and tackle this.

I'm glad this thread is here, maybe being accountable will help.

                                Whatever will be, already is...
 
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Old 09-01-2009, 01:33 PM - Thread Starter
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nice to see so many new faces! September is a kinda the start of a new year with some of the kiddos starting a new school year etc. Its a good time to get back on track.

laohaire, great job in August, welcome to bs2!

samandhenrysmom, let me know how envelopes go. I do envelopes for blow and I love it. I need to do them for groceries too. Good luck with the ELP, I'd love a recap of his advice.

eirual, great momentum. Its a real treat to tell your money what to do/where to go. Dh and I still get pleasantly surprised when we see there's money in the bank.

twin_mama, woohoo on the second month of staying in budget, you're a budgeting guru.

smallmama, great job on paying off that credit card. What's up next on the chopping block?

The Hidden Life, I'm sorry. Its hard when you know what you should do but you don't want to. Can you do a nice dinner at home? Ship the kids off to gmas and have your anniversary at home?

BelovedK, take a deep breath, get out all the bills, paperwork and start tallying up your debt. You can't tackle it until you know what there is. You can do this. We can help you make a budget if you need. As for date night and eating out, there are substitutes that won't make you feel too deprived. if you can't go cold turkey on the eating out/shopping without big slip ups (and I couldn't at first) then figure out a way to recreate them without the big bucks. We replaced weekly dinners out with a coffee night and then got into buying special foods to have at home for treats. We also rewarded our mini successes with the occassional meal out, eg paid off a bill, take 20 and get take out. Its all about what works for you, better an occassional meal out then saying fuck it, this plan doesn't work for me and going back to your old ways.

I'm a book junkie too, learning to use the interlibrary loan system was amazing to me, ordering the books and not just browsing the shelves was so much better for me.

mamabain, sorry to hear you had surgery, hope you are feeling out now. I love your no new debt mantra, you can do this.

tynme, give your kids the gift of being financially savvy. Take the year or two and scrimp and pay everything off and briefly explain to the older ones what you are doing and why. I wish, wish, wish someone had set me off on a good money path.

phillytwinmama, how are you doing in bs3? That's where we are and I find it harder to keep the motivation up without the quick sucesses of bs2.
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Old 09-01-2009, 02:04 PM
 
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Hey all. Still on BS 1, but will be moving to BS 2 around the first of October when DH's living stipend comes out.
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Old 09-01-2009, 03:00 PM
 
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I'm feeling discouraged about money right now after our dog had two seizures, and after $650 at the vet they say its epilepsy and he'll be on medication for life. There will be more money too, as the blood level of the medication have to be checked after 14 days, 45 days, and every 6 months, costing another $100 each time. Plus the pills, but they aren't too bad, maybe $10/month?

I guess its not a big deal, we will still be out of debt eventually, but it setbacks like this really suck. I really hope DH doesn't end up on strike at the end of September!!!!

Mommy to  N baby.gif, born 2/20/12.

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Old 09-01-2009, 03:01 PM
 
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Well as it's been for the past 3+ years, I have the feeling that my job might not as secure as I would like it to be. We are heading into our slow season with work, and although I am the only person in my department, I am also only one of the few people now that doesn't work in the home office (2 time zones away... and no moving back is not an option).

So with this new development again, I have transferred some of my car replacement fund (BS3.1) into my FFEF (BS3).
My FFEF with a small severance package that I would get with a layoff would now take me to 9 months. I still have $2K in my growing car replacement, but no current plans to actually replace that car in the near future.

I know I can't plan for everything, but all of a sudden I have a burning need to be more frugal. Hopefully, nothing will come of it, just as nothing has come of it the past 3 years, but alas, I have this new sense of panic again and that is just not fun...

But DR's plan did get me thru to this point, so I do have peace that the debt is gone and it isn't coming back ever.
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Old 09-01-2009, 03:20 PM
 
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I read the total money makeover last week and I was quite impressed. I'm not in horrible financial shape but I want to be better.

I guess I'm at BS2. Sigh. Getting divorced sure changes things.

I have 6 months of emergency funds saved up (I have more than that, actually) but will use that to pay STBX for his half of the house so I don't have to take on a bigger mortgage. I think. Here's the rub:

I'm torn between using the emergency fund to pay off debts (car loan and loan from exMIL which is magically half mine now, long story) OR using it to pay STBX. I know DR says to pay the smallest debts first, but adding to the mortgage to pay him off seems so... drastic. Loan 1 is at 2%, loan 2 at 0% and mortgage is currently at 5% and would be higher if I added to it.

This would all be simpler if I had a job but right now I rely on spousal support. Once I'm employed again, I should be able to zip through the debt quickly.

Thoughts on using cash to pay debt or to avoid adding to the mortgage?

Me treehugger.gif+ Him eat.gif + DD flower.gif + DSS1 guitar.gif + DSS2 REPlaySkateboard04HL.gif

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Old 09-01-2009, 03:40 PM
 
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(nak) I'm thankful for the new month and fresh start!!! Participating in no-spend this month and planning to actually STICK to it this time! I just realized yesterday that, on average, we spend just over $200/mo on meals out & other non-necessary edible treats

So my goal this month is to stick to religiously stick to my budget...

My FFEF is at $1779/$8000 right now...I want to kick this thing out asap!


Oh...and welcome newbies!
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Old 09-02-2009, 10:43 PM
 
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Hello everyone!! We're still hanging out in BS#2. I'm having a hard time with commitment. The brat inside of me wants what I want. Finances were always a struggle growing up. I was the first in my extended family to graduate college, let alone grad school. I presently make decent money, and Dh and I paid off my $80,000 student loan after 8 years of marriage. We are sooooo close to being debt free except for mortgage that we can taste it. We make decent money and have little savings, bare bones retirement, and no college savings for our kids. Since we've drastically reduced our credit card usage, we have no wiggle room in our finances, and we are counting down the days until payday. We know things need to change, but we are both struggling to let go of our entitlement thinking. I swear it's just like dieting. Both Dh and I have a "life is short, live it up" attitude with both food and finances. It's not good though. We need to change. We have a budget, but we haven't used it. This sure isn't easy!
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Old 09-03-2009, 01:08 PM
 
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Welcome new people :

We are still on BS#2 the balance of our Van is now below $5000!!
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