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Getting Out of Debt in October 2013

2K views 49 replies 11 participants last post by  orangemomma 
#1 ·
Do you want to get out of debt? Start living on a budget? Be able to start saving? Then this is the thread for you! Some of us use Dave Ramsey's method but please join us even if you're following someone else/your own plan. All are welcome!

Here's DR's plan:

Pre-Step 1: Get current on your debts and do a budget
0.1 No new borrowing.
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) to help snowball
0.7 Cut lifestyle (Cut cable, cell, extras, eating out) and/or get a second job to raise $1000 EF.
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
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

BS2 Pay off all debt using the Debt Snowball
2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest.

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: http://www.daveramsey.com or if you want a good DR discussion forum,http://www.llnoe.com is good but hardcore. Gail vax Oxlade's Til Debt do Us Part is great tv show, very motivating. Her website is:http://gailvazoxlade.com/blog Others like Suze Orman or Mary Hunt, really doesn't matter whose method you use, just start the process to getting out of debt.
 
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#27 ·
ok guys just smack me please. here i am trying to follow this plan and all i'm doing is running figures through my head trying to find a way to afford this house that is for sale in town. 1500 down and 350/m. Just stop me please. I know i can't afford it yet since the 350/m is own finance and doesn't include property tax and that is another 200/m.
 
#28 ·
Polly, you have money for taxes and house insurance and the closing costs. Save for it since a home is a "four walls" but home owner ship has so many hidden costs. There are times I wish I had not bought a home.
 
#29 ·
it is owner finace no closing costs but i really don't have the money unless i take it from the debt snowball. the house is a fixer upper which is why it is owner finance. but i look at the wood floors and the backyard is awesome and i just want it. I know i need to wait i really don't have the money til jan :)
 
#30 ·
Owner financing is good, but I would still wait until you have the funds to really make a go of it, especially since it is a fixer upper. I know there was a house down my street - new siding and windows, great wood floors, huge fenced in back yard for $10,000 because of foreclosure. It had been divided into 2 apartments, but could have easily been made back into a single house with 3 almost 4 bedrooms and 2 baths. DH and I talked long and hard about it and decided we didn't want to be anymore tied down to home ownership since we might move to another city within the next couple of years. I think if we were at the 6 months of living expenses in savings, I would have been more apt to buy the house because you never know when an emergency is going to over run your emergency fund (which can happen all too quickly sometimes - new furnace, new roof, etc).
 
#31 ·
thaNKS i needed the talk down from this. I ran some numbers through my head while at work. 350/m is the patment and i would have to save almost 200/m for the prop tax, then the water bill figure this might cost about 600/m all together and i just couldn't afford that until i am out of BS 2. thanks again.
 
#32 ·
Pollyanna, at least you have something tangible you are working toward - owning your own home. I know you are close to getting BS 2 done and that is so exciting. Think of how you can save once you don't have debts you have to pay each month. For me, knowing that money is ear marked for a specific purpose helps me save better (I have "sinking funds" for things like car repair, Christmas presents, etc that are expenses I know are coming, but don't happen every pay period).
 
#33 ·
Excited about this - I snowballed a debt today! It was a credit line that had already been closed so no danger that I would fall into old habits and put something else on it. This has got me jazzed to do it again and to work harder.

Technically I am still on pre-baby step 1, and I don't have a baby emergency fund fully loaded yet. I have mentioned this about myself before - that I really felt that doing thefirst couple of steps in the order that DR outlines is not going to work the best for me. Not saying that what he says doesn't make sense - just saying it doesn't motivate me in the order he outlines and motivation has been an issue for me.

Keep up the good work ladies and welcome to the new participants!
 
#35 ·
I would make a pet budget - food, vet bills, flea collars, etc.
 
#38 ·
UGH Trekkingirl, I got one several months ago. I am fighting the ticket and my court date is in December but here we have to pay a fee to contest it with the magistrate. Still worth fighting it though because they often cut the amount owed down. My biggest concern is that my insurance will go up. Sorry to hear. Very frustrating.
 
#39 ·
Here you can pay the ticket up front and have a trial in writing instead of in person. If the cop doesn't do his homework than you automatically win and they refund your money. I'm going to help DH try to do that because there is no way we can afford that much money.
 
#42 ·
SkinnyloveBC, congrats on tithing this pay check. I hope you will be aBle to Find ways to make your funds stretch.
 
#43 ·
Thank you, lilac! We're sure trying!

On another positive note, DH is expecting a raise in January so that will help us be able to start our emergency fund and get our snowball going. Looking forward to making it to January!

Pollyanna, what kind of puppy did you get? How are things going with the new member of the family? :)
 
#44 ·
Joining! We are on Baby Step 2. We have paid off all CC & Unsecured in the last few months. Our main 'sacrifice' is that we live in a very small & ghastly carpeted 2 bedroom apt.

Our remaining debts are a Car (one car family) & a house in our former location. In November we are saving for a HVAC for that house to help with a sale (that we are praying for!), then we will go 'gazelle intense' on the car.

The house is the biggest issue we face. There is a small chance we will move back to it, we are sort of in a holding pattern with my DH's work (they are waiting on a large funding source). I still LOVE but the idea of being totally debt free is alluring!

We will also face bills from my upcoming birth. However between our HSA & taxes, we should be able to handle that!

Closing my last remaining CC today! Dang Old Navy! DH & I are also taking a DR class for the second time, class 5 is tonight!
 
#46 ·
Welcome, dinahx! Congratulations on paying off your last credit card. I hope that the house updates will result in a sale! I'm sorry you're in limbo with your DH's job. I've experienced similar frustrations with my job and it's a difficult place to be. And we're also a one car family!
 
#48 ·
ok well i just changed my game plan for the month. i have been saving for a laptop to replace the one that got stolen. i had it on layaway but 6days after getting it off layaway the screen went. So what i decided is that money plus what i deposit from my check this week will be enough to pay off the rest of my SL debt. 647 dollars. I think i will be doing a debt free scream here in a week :)
 
#49 ·
Awesome pollyanna!
 
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