Getting out of debt in January 2014 - Mothering Forums

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#1 of 34 Old 01-03-2014, 07:59 PM - Thread Starter
 
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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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#2 of 34 Old 01-03-2014, 08:03 PM - Thread Starter
 
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Happy New Year! Here's to paying down debt and building confidence, independence, and security in 2014!
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#3 of 34 Old 01-04-2014, 02:43 AM
 
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Subbing. Thanks skinnylove


 Breastfeeding, babywearing, homeschooling momma to two. 228/2014 items in decluttering challenge (643 items gone last year 2013, 625 gone in 2012) Ramsey's BS1 $455.31
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#4 of 34 Old 01-04-2014, 12:04 PM
 
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My goal is to sell stuff to help fund our food budget. I have dresses I can sell since with breastfeeding I can't wear them anymore. We have a minimum beans and rice budget right now but I want to work up to something more that that.

Crafty Geeky lady (37, hypothyroid) married 7/2010 love of my life (42, azoospermia). I believe in MIRACLES! Twin boys born 12/21/13 at 40 weeks 2 days! 3/52 crafts in 2014 Ramsey's BS1: Done! 2/17/12 BS 2 goal: 6/7/17 no sperm initial DX 3/23/12 BFP 4/7/13!
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#5 of 34 Old 01-04-2014, 12:09 PM - Thread Starter
 
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Great idea, lilac! I have a few items I've been trying to sell on Craig's list with no luck. Maybe I'll tackle that again! We could certainly use the money. Also, I've been brainstorming about possible niches on Etsy that I could break into.

I've also been more vigilant about returning items that we buy but don't end up needing/using. For example, I returned a couple of things to Target last week and got $20, which helped us make our food last till the next check.
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#6 of 34 Old 01-04-2014, 01:09 PM
 
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Yeah, I have a couple things to return to Kohls. Too pad they were purchased with gift cards but maybe I can get another set of Jammies, no. A night gown. Thought I coul breastfeed in it since it buttons down the front but it isn't comfortable that way. A top and bottoms are better.

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#7 of 34 Old 01-04-2014, 01:41 PM
 
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Has anyone lead or attend fed FPU? Thinking of leading one for motivation/spreading the word purposes.

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#8 of 34 Old 01-04-2014, 01:51 PM
 
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I did FPU twice Jan of 2012 and Jan 2013 just to keep myself motivated. Well
Worth it. I don't feel I am at the place to lead one yet as I still have so much debt to get rid of. I think once I am past BS2 I would feel more comfortable leading but then I may be an inspiration to those in lots of debt like me to not give up and keep plugging away at their debt snowball.

Crafty Geeky lady (37, hypothyroid) married 7/2010 love of my life (42, azoospermia). I believe in MIRACLES! Twin boys born 12/21/13 at 40 weeks 2 days! 3/52 crafts in 2014 Ramsey's BS1: Done! 2/17/12 BS 2 goal: 6/7/17 no sperm initial DX 3/23/12 BFP 4/7/13!
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#9 of 34 Old 01-04-2014, 08:47 PM
 
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I have a question about the budget vs EF. My rent is due the 1st. My ex is supposed to pay support by the 1st but is usually a few days late so for instance this month it will hit my account on ,Monday the 6th. I have I have about 1300$ n checking and savings to cover the first weeks rents and other bills. Is this considered and EF or should that be separate? When the support does hit the bank it is a months worth of living expenses and extra for snowballing etc. So this really confuses me.

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#10 of 34 Old 01-05-2014, 06:47 AM
 
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I keep a buffer in checking of the next months expenses but it took me almost a year to get a month ahead. We keep our EF separate in a capitolone360.com online account so we aren't tempted to spend it unless it is a true emergency. takes 2 days to transfer funds back but then we don't end up spending the money on food or gas or whatnot.

Crafty Geeky lady (37, hypothyroid) married 7/2010 love of my life (42, azoospermia). I believe in MIRACLES! Twin boys born 12/21/13 at 40 weeks 2 days! 3/52 crafts in 2014 Ramsey's BS1: Done! 2/17/12 BS 2 goal: 6/7/17 no sperm initial DX 3/23/12 BFP 4/7/13!
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#11 of 34 Old 01-05-2014, 08:43 AM
 
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Quote:
Originally Posted by lilacvioletiris View Post

I keep a buffer in checking of the next months expenses but it took me almost a year to get a month ahead. We keep our EF separate in a capitolone360.com online account so we aren't tempted to spend it unless it is a true emergency. takes 2 days to transfer funds back but then we don't end up spending the money on food or gas or whatnot.

Thanks, I thought that is what i needed to do too. I was just keeping an extra 1000 in checking but i just had to transfer over 200$ more to make sure everything is covered for the first week. I am going to aim for 1200$ as my buffer in checking for now and not transfer things back and forth to savings. So at this rate I have 300$ in my EF, so I guess I am on BS 1 where i was thinking i was on BS 2 and have been paying my bills as such in a debt snowballing manner. I have a cc and a dental LOC  that have 0% interest for only so many more months and I want to get them payed down asap. 


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#12 of 34 Old 01-05-2014, 10:47 AM
 
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I found getting the $1000 emergency fund to be a challenge at first. We really had to rethink where our money was going . We actually fully funded our EF with a tax return otherwise I think it would have taken us a year to get to $1000.

Once we started snowballing it was good but we have had fits and starts with that too where we needed to cash flow some unexpected expenses rather than pay extra on our debts. Our goal was not to acquire new debts so it fit in with DR's philosophy. In 2 years we have paid off more than $20,000 in debts and it feels good. Still have a long way to go though. Must keep up the momentum.

Crafty Geeky lady (37, hypothyroid) married 7/2010 love of my life (42, azoospermia). I believe in MIRACLES! Twin boys born 12/21/13 at 40 weeks 2 days! 3/52 crafts in 2014 Ramsey's BS1: Done! 2/17/12 BS 2 goal: 6/7/17 no sperm initial DX 3/23/12 BFP 4/7/13!
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#13 of 34 Old 01-05-2014, 11:19 AM
 
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Quote:
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I found getting the $1000 emergency fund to be a challenge at first. We really had to rethink where our money was going . We actually fully funded our EF with a tax return otherwise I think it would have taken us a year to get to $1000.

Once we started snowballing it was good but we have had fits and starts with that too where we needed to cash flow some unexpected expenses rather than pay extra on our debts. Our goal was not to acquire new debts so it fit in with DR's philosophy. In 2 years we have paid off more than $20,000 in debts and it feels good. Still have a long way to go though. Must keep up the momentum.

I probably won't have much problem getting to the 1000$, already have 300$ maybe by april if i get the partime job I have an interview for it may be sooner like March. . I had to pay for an online class/books and that was 350$ of my extra money for January! But I didn't put it on a credit card so that is freeing. 


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#14 of 34 Old 01-07-2014, 05:50 PM
 
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Been getting a ton of overtime, that will all go to dh student loans

Unassisted birthing, atheist, poly, bi WOHM to 4 wonderful, smart homeschooling kids Wes (14) Seth (7) Pandora Moonlilly (2) and Nevermore Stargazer (11/2012)  Married to awesome SAH DH.

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#15 of 34 Old 01-07-2014, 07:01 PM
 
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Always good!

Crafty Geeky lady (37, hypothyroid) married 7/2010 love of my life (42, azoospermia). I believe in MIRACLES! Twin boys born 12/21/13 at 40 weeks 2 days! 3/52 crafts in 2014 Ramsey's BS1: Done! 2/17/12 BS 2 goal: 6/7/17 no sperm initial DX 3/23/12 BFP 4/7/13!
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#16 of 34 Old 01-16-2014, 06:23 PM
 
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Subbing and posting DR's steps on my BB at work to remind me, in part, of why I'm there. ;)


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#17 of 34 Old 01-16-2014, 10:34 PM - Thread Starter
 
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Good idea, Momma2Addison!

We are looking forward to filing taxes and getting our refund. We're planning to use it to start our $1000 EF and pay off at least our 4 lowest credit card balances (they're pretty low--less than $400 each).

Anyone else planning something debt-related with their tax return? Any tips from the more senior/experienced members?
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#18 of 34 Old 01-17-2014, 01:14 AM
 
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I am totally looking forward to our tax return. Going to pay off one school loan and use the rest to min payments for the next few months so I can stay home with my twins.

Crafty Geeky lady (37, hypothyroid) married 7/2010 love of my life (42, azoospermia). I believe in MIRACLES! Twin boys born 12/21/13 at 40 weeks 2 days! 3/52 crafts in 2014 Ramsey's BS1: Done! 2/17/12 BS 2 goal: 6/7/17 no sperm initial DX 3/23/12 BFP 4/7/13!
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#19 of 34 Old 01-17-2014, 07:22 AM
 
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We are working on paying off my student loans and then our mortgage right now.  I don't really follow Dave Ramsey because we don't budget.  Instead, we spend as little as possible on everything and are on a complete freeze until my loans are gone.  

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#20 of 34 Old 01-17-2014, 05:45 PM
 
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i did that last yr. i paid off my car loan with my refund then took that payment to pay off the student loan faster. this yr i'm using the refund to finish BS3. there doesn't seem to be a thread for those that are past BS2 so i just read how everyone is doing.

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#21 of 34 Old 01-17-2014, 11:02 PM
 
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Pollyanna, it is great to hear about people who got out of debt and have stayed there! bS3 is the fully funded emergency fund , right? What a great tool to keep out
Of debt.
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#22 of 34 Old 01-17-2014, 11:02 PM
 
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Biofarmer, I prefer to keep record of my "cash flow" rather than "budget". I want to know where my money went so I can find ways to save money on expenses in order to put more into loan pay off.

For everyone, here is a blog
To think about what is "in" for this year http://www.daveramsey.com/blog/whats-in-and-out
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Crafty Geeky lady (37, hypothyroid) married 7/2010 love of my life (42, azoospermia). I believe in MIRACLES! Twin boys born 12/21/13 at 40 weeks 2 days! 3/52 crafts in 2014 Ramsey's BS1: Done! 2/17/12 BS 2 goal: 6/7/17 no sperm initial DX 3/23/12 BFP 4/7/13!
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#23 of 34 Old 01-24-2014, 08:04 AM - Thread Starter
 
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Lilac, I agree about the cash flow versus budget. I'm glad you said that! The budget has felt so forced and strained. For whatever reason, recording all of our purchases and then looking for areas to cut back each month feels much more natural for us, which results in better success.
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#24 of 34 Old 02-17-2014, 03:33 AM
 
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how is everyone doing? i  have decided to take a FPU class. I'm paying for my mom to take it also we start march 5th

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#25 of 34 Old 02-18-2014, 03:28 AM
 
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Sounds like a great idea. I think you will like the class.

My husband and I just changed cell phone companies to Pages Plus Cellular. We had to have some reprogramming done on our phones but we get 1200 minutes, 3000 texts, and 500. Mb data for $29.95 a month. The company Kitty Wireless that is a dealer for PPC is running a deal to try the $12 service free for a month. It is nice to be able to bring my Verizon phone and not HAVE to buya new phone.
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#26 of 34 Old 02-18-2014, 04:57 AM
 
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Quote:
Originally Posted by lilacvioletiris View Post

Sounds like a great idea. I think you will like the class.

My husband and I just changed cell phone companies to Pages Plus Cellular. We had to have some reprogramming done on our phones but we get 1200 minutes, 3000 texts, and 500. Mb data for $29.95 a month. The company Kitty Wireless that is a dealer for PPC is running a deal to try the $12 service free for a month. It is nice to be able to bring my Verizon phone and not HAVE to buya new phone.

If that's shared between the two phones that's amazing especially if it's enough service for both of you. I've been using Red Pocket for almost a year now. I have to purchase my plan online to use this service but it's $29.99 mo for unlimited talk and text with 500mb data. They have a ton of different plans. Dh still has the $50 unlimited talk, text, and data from Net10. I'd like to lower his phone bill as well but that extra data is all the entertainment he has when he's at work (works off). 

 

I've never really done the DR thing before but it sounds interesting. I'm working on paying off our new medical bills from DD right now plus getting some more savings. We need to get our EF back up although it's close and I'm desperately trying to get the checking out back to a one month buffer like we use to have it. 


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#27 of 34 Old 02-19-2014, 04:44 AM
 
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Hi all! I am new here. I used to be active a few years ago on other boards but never posted here and decided that I should start back up again.

I paid off one of my student loans today! :joy

 

I am the money manager of the family and basically just inform DH of what I am doing. Which he thinks is amazing and I carry on doing what I am doing. I would say this is nice but figuring out his retirement savings by myself can be overwhelming. I love Dave's principles but making them into a plan that worked and made sense for me was important. I feel like money managing much like fitness or living a healthy lifestyle must be done in a sustainable way not in a binge and purge unsustainable burn out way. For each of us that is different but this is what has worked for us.

 

We never did a written budget. I prefer to track our expenses and cash flow and looking to see where we can cut back. I am as frugal as possible but setting a certain magic number in an envelope for groceries stresses me out, burns me out, and gives me anxiety. I can't stress out about spending $63 on pet food when there was only $60 in the envelope.

We don't have TV aside from Netflix. We watch all our shows on our computer.
I never stopped any retirement contributions I felt like maintaining DH's employer match was important.

Once we paid off the airlines CC and stopped carrying a balance from month to month I started using that card for all our automatic payments and pay it off every month.

I didn't amputate the one car we make payments on or even include it in our debt snowball. The interest rate is so low that finishing out the life of the loan will only cost us $350 in interest.

 

Currently we are at step 2 and 3. I combine putting money on our student loans and into our savings to build our 3 months. I have never calculated the amount we have payed off but we had about $12,000 in CC debt and $23,000 in student loan debt this last June. We currently have four student loans left which total around $14,000 and then the house. We have one month of expenses saved. Dh's job is very secure so I feel like 3 months should be adequate.

 

After we finish with these student loans and 3 month safety net I am thinking we should start investing 15% for retirement and then split the rest between paying off the house early and saving. We have a $25,000 second home repair mortgage that I can't wait to get rid of! The house is 2 years into a 15 year mortgage but I would love to pay it off faster! Both our car's are relatively new an 05 and 2010 so the car replacement fund is not high on my priority list. I plan to go back to college this fall, (I went but never finished) and feel like a tuition fund for myself is more important than a new car fund for us at the moment.

 

I am always so inspired to read what and how everyone else is doing!

 

 

 

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#28 of 34 Old 02-21-2014, 04:23 AM
 
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congrats on the student loan i know what it felt like making the last payment on mine.

it isn't what the interest costs on the car loan. it is what you could be doing with the payment. that money could be invested in a mutualfund and earning you money. so where the interest rate is low on the loan you are also losing what you could be earning on it also.

but right now i have no car payment and still haven't finished bs3 got 5 hundred more to finish that. then i'm saving for a down payment on a house. that might take a while since all i have is 250/m i can put toward that.

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#29 of 34 Old 02-22-2014, 07:53 PM
 
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Thank you! That is an amazing accomplishment! How many months did you decide to have saved?

We purchased a foreclosure and took out a 2nd for the repairs and I can't wait to pay it off! That is essentially my "house down payment."

 

As far as the car goes. I feel like I could spend the chunk of change and pay off the car which will save me $350 in interest over the life of the loan and give me an extra $220 a month. Or I could put that exact same money that I would put on the car in DH's 401k which had a 28% return last year and just pay the $220. I feel like if I put it on the loan I am only saving 3% where if I put it in the 401k I make 25% (The 28%, minus the 3% that I would have saved by paying off the car.) Which to me makes more sense. Am I right or am I looking at that wrong?

 

Here's to finishing BS3!

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#30 of 34 Old 02-23-2014, 06:42 AM
 
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it does make sense also think ahead and do a sinking fund for the next car so you can pay cash.

the part DR wants people to get past is payments. The more payments you have the more risk you have if someone in the house should lose a job. It is easier to get through a temp job lose if one doesn't have payments to worry about. I'm not against doing something different just keeping in mind he really does want to min risk that payments give people.

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