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Dave Ramsey Support Thread Winter 2015

5K views 50 replies 12 participants last post by  kindofcrunchy82 
#1 ·
I have simply copied this from the summer thread that lilac put up. I will be back later tonight or tomorrow am to log in my goals

We are here to support each other now while we live like no one else, so that in the future we can live like no one else.

The Baby Steps:

Pre-Step 1: Get current on your debts and do a budget
Before you begin the baby steps, you must be current on your bills and, if you aren't doing one already, begin doing a monthly budget.

Baby Step 1: Save $1000 cash in the bank
Start your emergency fund . If your income is less than $20,000, make that $500.

Baby Step 2: Get out of debt
With Gazelle intensity and using the debt snowball, pay off all your debts.

Baby Step 3: Finish the emergency fund
With the money you were paying towards debt, now with no debts, you can save 3-6 months of expenses into a fully funded emergency fund.

Baby Step 4: Save for retirement
Saving 15% of your income didn't seem possible before, but with no payments, you'll be ready for retirement and not have to take a job as a Wal-Mart greeter.

Baby Step 5: Save for College
Instead of taking out student loans, your kids will be eternally grateful you thought ahead and had a plan for their higher education.

Baby Step 6: Pay off the house

Baby Step 7: Build Wealth and Give It Away

---------------------------------------------
Expanded Baby Steps:
0.1 Commit to NEVER borrow $$$ EVER for ANYTHING other than possibly a house
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 the basics (You MUST have Food, Utilities, Shelter, Basic Transportation)
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 "extras", Internet, Eating out, etc) and/or take a second job if $1000 EF will take more than 30-90 days. (depending on income)
0.8 Get current on ALL bills.

1.0 Save $1000 in Baby Emergency Fund (EF)
1.1 Chop up CC's. (You have an EF now, no NEED to keep those CC's!!!)
1.2 Get Health Insurance NOW (chances of getting sick w/major medical bills are larger than that of death), especially if you have children.
1.3 Get Life Insurance NOW if you have debt/your family couldn't make it financially if you died. Especially important if you have children! Social Insecurity only provides a small amount of coverage if you have dependents.
1.4 Amputate cars that you can't pay off within 24 months (you have an EF to fix "bondo buggy" if something should happen)
1.5 Consider raising insurance deductibles to $500 or $1000 and dropping full coverage on paid for "bondo buggy" (you have an EF ya know)
1.6 Draw up a will.
1.7 Get Long-Term Disability Insurance.

2.0 Do 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!!!)

3.0 Save 3-6 months EXPENSES in EF (FFEF)
3.1 Start replacement car fund.
3.2 Save up 20% for home purchase OR pay down existing mortgage to the point that you can drop PMI.
3.3 Start furniture or other non-essential stuff replacement fund.
3.4 Move up in car if you still feel the need to (must pay cash for it!, you can only buy NEW if you have a net worth over a million dollars)

4.0 Start contributing 15% of your paycheck to retirement.

5.0 Save for kids college fund.

6.0 Pay off the house early.

7.0 Live like no one else since you have lived like no one else! Give, Build Wealth and Have Fun!

Here's a link to some of Dave's budgeting forms - check them out if you need a place to start with creating a written "zero based" budget.
http://beta.daveramsey.com/tools/budgetForms

Some good quotes for motivation...

"If broke people are making fun of your financial plan, you're on track." -Dave Ramsey

"Whenever you find yourself on the side of majority, it is time to pause and reflect." -Mark Twain-

"What can you do when you have no payments? Anything you want!" - Dave Ramsey

"Debt is dumb, cash is King, and the paid off mortgage has taken the place of the BMW as the status symbol of choice" - Dave Ramsey

"People often say that motivation doesn't last. Well, neither does bathing-that's why we recommend it daily." - Zig Ziglar

"We buy things we don't need with money we don't have to impress people we don't like." - Dave Ramsey
 
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#2 ·
I have read DR's Total Money Makeover 4 times (currently on time #5 - I get the book from the library every time. Can't see paying for it) I don't agree with everything that he says in that book or in his others. I have tried the money makeover half-heartedly in the past.

BUT, I am still drowning in debt (and obviously he is not!) so 2015 will be the year that I am going to get gazelle intense and see what can happen.

Right now I am on pre-baby step 0.8 - getting current on all of my bills. There are only two that I am behind on. One I will be able to straighten out and get current by the end of January. The other is a student loan that I am significantly in arrears on. Not sure how to work that one.

I am also working on baby step 1 - fully funding my baby EF. The goal to fully fund that will be the end of January also. (as an example of how I am going to be gazelle intense - last year it was my intention to fund the baby EF - in 12 months I never got more that $500 in it - not enough intensity..........or so I am telling myself)

Where are other people in their journeys to financial freedom?

Best wishes for a debt free new year!
 
#4 ·
We are completely debt free, (with the exception of our 15 year mortgage) for several years now, on one income.

We paid cash 6 years ago for a full-sized 12 passenger van with 13,000 miles and have another decent used car. We are funding a home addition little by little.

The plan works. We do disagree with doing anything to get out of debt..I don't think children asked to be born, so we think it isn't right to be workaholics for a debt situation parents created. We just took it a little more slowly. We tithe, and save, and live differently than most folks. We took a week long vacation in November, to Disneyland, with all of our children, and paid cash for it all.

We do use a credit card, because debit cards are not backed with the security and refunds when the number is stolen-ours was. However, after this long, we have great discipline, and always live on a budget, so it's no biggie to charge $100 when we already set aside the $100 and then send it in. Anyway, it's OK to tweak things to make them fit your life.


Keep it up, mama's! It works!
 
#27 · (Edited)
We are completely debt free, (with the exception of our 15 year mortgage) for several years now, on one income.

We do use a credit card, because debit cards are not backed with the security and refunds when the number is stolen-ours was.
I've seen your story here and there in this forum and I think about it all the time. :) I'm curious if you invested according to Dave's suggestions?

I borrowed TMMO a couple of days ago from the library and am almost finished with it (hard to put it down!!) I printed out the charts and can't wait to get started.

Before I go on about my own situation, I wanted to clarify something... In TMMO, Dave quotes from the Visa website that their debit cards are backed the same as their credit cards. Is this not what you've found to be true, @MyFillingQuiver ?

@eirual , can I ask why you didn't buy a slightly used car about a year old instead of a brand new car? I don't think I could ever buy a new car again after learning about the instant depreciation! I bought my 2007 Sienna in 2008 for $17K rather than the $30K they cost brand new. I love that vehicle and plan to drive it into the ground. :D

@kindofcrunchy82 , sorry about all of the medical setbacks. I hope everything turns out okay and that you can get back to your snowball in the near future.
We have state insurance, but I refuse to take any of us to a state covered dentist, so I have to pay out of pocket for us to see a holistic dentist I trust. It's worth it to me, and even though our dentist offers us a really big discount if we all come in at once, I just can't come up with that chunk of money so I stagger our appointments individually throughout the year.

I looked into Dave Ramsey after DH had made a mess of his finances. BUT, I realize that he has to have the TMMO in his heart before I decide to put any energy into his debt elimination and financial future. In a way, I'm thankful that we're not married because his mess would be my mess, too.
As for my own financial status, I wish I'd read Dave's book a couple of years ago! I got my first CC at age 19 and thought I was officially an adult (just like Dave says in his book...) Needless to say, I ended up with about $30K in CC debt. I was able to just pay the minimum balances but that wiped out all of my income and I had to put food, gas, etc. on the CCs to survive.
I looked into Chapter 7 bankruptcy and consulted legal aid (which was totally free of charge for me.) So that's what I ended up doing, almost exactly one year ago. As soon as the 6 month wait period was over, I took the advice of the (required) credit counseling service and opened a CC to start building my credit :)eyesroll.) It's been good (I've been good) and got a CC with a credit limit of $200. I'd set aside $200 cash each month and put $200 on my CC and pay it off each month. My limit just recently went up to $500, which frankly scares me.
My computer died in November and my mom gave me her one and only CC with zero balance to purchase a new one so now my *only debt is just under $1300. I say "only debt" because when I start writing down my debt snowball chart, I need to include money I borrowed from the kids' piggy banks over the years (which actually amounts to quite a bit!) I'll post the total once I figure it all out. My car is paid off.
My problem is, I don't have much of an income! As I've been reading DR's book, I've found myself thinking of crazy ways to make money because I want to handle it properly! :lol
I've done babysitting off and on but with a baby coming in July, I'm not sure I should try to find something now or wait until a couple months after baby comes. I offered to watch my neighbor's son (I did last summer) because he's 10 and lives right across the street and I know I could handle that even with a brand new baby. That would at least pay for the monthly chiro and then some. And yes, the chiro is a necessity or else I get chronic headaches that leave me unable to do anything (plus if I want to be able to walk for the rest of my pregnancy, I need to go!) We do a family plan where all of us go once a week for $200/month which is a great price.
It gets a bit sticky because we qualify (the kids and I) for state medical and food assistance. Does Dave get into this anywhere? If I give that up and start working, I'll be w/o medical insurance and w/o $700/month of food assistance. I'm not sure where that will leave the kids as far as medical, but they'd probably qualify for CHIP or something like that which I might have to pay something for.
I can sell things around the house (we don't have much of value) and do a little babysitting here and there, but if I get an actual job, I'll lose my benefits.

SO, I'm current on my debt, so I should start by saving my $1000 EF, then I can start the snowball, which I guess I'll list the kids piggy banks first, then the computer (CC) debt. Feels funny doing it that way since I'm paying a bunch of interest on the CC but none of the piggy bank debt. I'm REALLY feeling inclined to flip it around.
After all of that, and assuming I can get my larger EF together at some point, it would be investment time, but the whole state benefits thing has to be decided before that can happen.

My feeling on that whole thing is that Dave would say the same thing as he does about SS, that it's not guaranteed to be there and that if I stay in this position, I'll have NOTHING at retirement. So in the long-run, I'd be better off giving up the state benefits (eek!) and making money and investing it wisely. Gulp.

I'm not even going to get into DH's debt yet because it'll be a waste of my energy until he has that TMMO in his heart moment.

I'd also like to get my mom into this but she's on a fixed income (SS) that barely covers her monthly expenses and her only debt is a HELOC for about $9K - house is paid, car is paid (but is on its last legs...) My Dad's gone and my mom has no retirement, my Dad had nothing, no life insurance, nada. The good news is that she owns the house and that leaves possibilities. At age 71, I don't know how to direct her.
I have dreams of us - my mom, us - including DH - and my sister and her 6 year old daughter, all living on one property with a lot of land and individual living quarters, in some form or another. I keep thinking if we all pool our resources, we'll be better off. It's just my sister and me, so my Mom will most likely need us down the line.

There's the story!
 
#5 ·
Hi All,

I am in BS 2. I have a larger EF than it is more closer to 4500, one month of expenses , but I cannot justify paying down the debt with the money given my source of income (child support)
I have fought for years to get out of debt. I paid down about 3500 in 2014. I had a lot of changes as well, I moved in with DP and got a little windfall from Child Support/alimony and now DP and I are settled in our home and have a round about knowledge of our expenses and income. That being said while I don't agree with everything in DR I am going to give the lowest balance debt paydown idea a try this year. Also DP and I plan to take the kids on a small trip in the spring but we will pay cash for that.

I plan to put about 230$ extra per month to paying down debt in addition to minimum payments. I should be debt free of my debts from student loans and credit cards by Sept 2016 then we will work on DP's car loan which is the highest debt we have between the both of us.

My debt:

Perkins loan 432
FED 1: 608
Fed 2: 987
Fed 3: 1362
---------------- the above debts should be paid off in 10 months!
Fed 4: 2335
CC: 2636

DP:
auto loan 9000--we cannot amputate this because DP is upside down in it atm, Plus is it a minivan and my paid for car is not big enough for all the kids. Hoping to have it paid down within a year of all the other debts as I believe he still has 4 years left to pay on it or a bit more.
 
#6 ·
Well, I don't agree with everything DR says, and some life circumstances have led to things being completed out of order, but:

Pre-Step 0: Get current on your debts and do a budget
Before you begin the baby steps, you must be current on your bills and, if you aren't doing one already, begin doing a monthly budget.
0.1 Commit to NEVER borrow $$$ EVER for ANYTHING other than possibly a house No can do. Just found out the roof has a leak, right after the holidays and before I've gotten more than $10 in savings. I'll try, but some things will not be put off. And I'll prolly do auto loans, just for the credit rating (one of the things I don't agree with).

0.2 Talk with spouse and get him/her on the same page as you concerning finances He is totally on board. He lets me rule the money, and we have a meeting every week to specifically talk budget.

0.3 Do a written budget I have the mother of all excel spreadsheets, which tracks our money out until October.

0.4 Temporarily stop all retirement contributions We haven't had contributions for nearly two years.

0.5 Get current on the basics (You MUST have Food, Utilities, Shelter, Basic Transportation) Doing okay on these.

0.6 Amputate "toys" (bikes, boats, ATV's etc) if they will keep you from completing the snowball within 12 months I've never been able to afford such things, but now I feel weird checking off a box for being poor most of my life.

0.7 Cut lifestyle (Cut CATV, Cellphone, Regular phone "extras", Internet, Eating out, etc) and/or take a second job if $1000 EF will take more than 30-90 days. (depending on income) Cable has been gone for years, cell phones are basic only (and our only phones), any "extras" are freebies, internet is a necessity for my work, can't take a second job since that would require us to get childcare which costs money... ok, eating out - we do this maybe a few times a week cuz I get burned out on cooking everything from scratch, but we can do this for the short time it will be needed.

0.8 Get current on ALL bills. We are not current per se, but paying enough on everything to not get in trouble. We've been current for years, but we've had a bunch of things pop up since Christmas.

Baby Step 1: Save $1000 cash in the bank
Start your emergency fund . If your income is less than $20,000, make that $500.
1.0 Save $1000 in Baby Emergency Fund (EF) This will be done by the end of March. It will continue to accumulate until it reaches $4k. It's already set up.

1.1 Chop up CC's. (You have an EF now, no NEED to keep those CC's!!!) We stay in hotels a few times a year while traveling for my business. They pretty much demand CCs, so I keep one. And I keep the balance low. But I'm looking forward to having it paid off every single month.

1.2 Get Health Insurance NOW (chances of getting sick w/major medical bills are larger than that of death), especially if you have children. Done via DH's work.

1.3 Get Life Insurance NOW if you have debt/your family couldn't make it financially if you died. Especially important if you have children! Social Insecurity only provides a small amount of coverage if you have dependents. Done via DH's work.

1.4 Amputate cars that you can't pay off within 24 months (you have an EF to fix "bondo buggy" if something should happen) All cars are paid off.

1.5 Consider raising insurance deductibles to $500 or $1000 and dropping full coverage on paid for "bondo buggy" (you have an EF ya know) We never pay for full coverage once the car is paid off. Insurance has never helped that much anyways. We keep the deductibles pretty high.

1.6 Draw up a will. Planning on this by the end of the year. There are tons of changes going on in our situation right now, so we want to get all set up before getting a will that we might otherwise have to pay to do over.

1.7 Get Long-Term Disability Insurance. Done via DH's work.

Baby Step 2: Get out of debt
With Gazelle intensity and using the debt snowball, pay off all your debts.
2.0 Do debt snowball, paying all your debts from lowest BALANCE to highest. We actually have done it smallest to largest after sorting into three priority levels: pay now, pay asap, pay whenever (bills gone to collections more than 5 years before). We are down to the last bit, which should be done by the end of June. Then, we'll just have student loans, and we plan on upping the payments on those.

2.1 You can take your first vacation since finding Dave if you can pay cash for it. (no using the EF!!!) Vacation? I remember those. We had one once, several years ago. We should do that again.

Baby Step 3: Finish the emergency fund
With the money you were paying towards debt, now with no debts, you can save 3-6 months of expenses into a fully funded emergency fund.
3.0 Save 3-6 months EXPENSES in EF (FFEF) We are shooting for a full 18 mo.

3.1 Start replacement car fund. We might do this. I don't agree with this completely, but I do agree with a hefty down payment.

3.2 Save up 20% for home purchase OR pay down existing mortgage to the point that you can drop PMI. Not applicable. We own the house, mortgage free.

3.3 Start furniture or other non-essential stuff replacement fund. This is essential as many of our appliances are hitting the 25 year mark and will need replacing soon (energy efficient, of course).

3.4 Move up in car if you still feel the need to (must pay cash for it!, you can only buy NEW if you have a net worth over a million dollars) DH's car may need replaced soonish, but really both vehicles are in excellent shape.

Baby Step 4: Save for retirement
Saving 15% of your income didn't seem possible before, but with no payments, you'll be ready for retirement and not have to take a job as a Wal-Mart greeter. My mother's dream job is to be a walmart greeter. She's weird. We have a decent retirement fund from my previous job, some 401k's scattered around that I will be gathering together, plus I've started an IRA savings account (since the others are investments) with a decent interest rate. In a few months, I'll be putting more into that account each month. I'm not sure if I want to go with 15% at this time, though. We aren't the job-free retirement types... we'd always have to do something.

Baby Step 5: Save for College
Instead of taking out student loans, your kids will be eternally grateful you thought ahead and had a plan for their higher education. Given the massive PIA that student loans have been for us, this is actually going to happen faster than #4. We won't be able to save enough to pay 100%, but we can at least alleviate some of the issues. I'm actually looking at 5 year CDs (2.00% APR) instead of 529s, though we may diversify and do both.

Baby Step 6: Pay off the house Not applicable, we own the house mortgage free.

The biggest issue we face right now is that we don't have quite enough money for our bills. My parents let us buy the house from them for 1/3 the cost with monthly payments that were less then we would pay for rent. The offset is that we have had to pay for a variety of maintenance issues. It isn't a bad deal, just more sporadic. However, my first book should be out by summer, my second book should be in formatting soon, my third book should be self-published by May, DH is getting two raises that he thinks will be in by the end of January, the house ownership transfer will be finalized this month (which means we will stop paying my parents and start saving for taxes/insurance)... Just a lot of month for the money right now, and all is within reach.
 
#7 ·
Love this post, I love all things personal finance (I am weird). I have never actually read DR's books, but have seen his to-do lists and they are overall fine for most people. Ok, get prepared for my book response!

I do agree, even though it doesn't make true sense from a financial planning perspective, about paying the smallest debts first. Back in the day, I'd say around 1996, when Consumer Credit Counseling Service was truly non-profit, helpful and informative, I did a voluntary debt repayment plan (I just had so many bills, I couldn't keep up, was fresh out of college and had limited income, and supporting parents/family back home). This was their setup exactly. Snowball, paying off lowest balances first. I can tell you from experience, once you start seeing bills disappear, it just invigorates you to keep going. If you start from the highest balance/highest interest first, it just is so soul draining to see "nothing" change. Do the small balances first, it does help!

Just an idea, for college savings, I am putting money in a Roth IRA with this mindset: When it comes time to take out funds, any contributions can be withdrawn tax free, any funds you DON'T need to cover your kids' college, can remain in the account for your retirement (a college savings fund cannot be used by you if your kids decide not to go to college or something else comes up), and I have every intention that my future kiddo will contribute to their education, so this is only to help them out. If I want to take it a step further, I would imagine it is best to allow them to get student loans (no cosigning!! danger danger!!) and then I can either help with the payments once they are out, or pay it down from the loan principal). This will help the money to continue to grow in the IRA and help them establish their own credit histories without worrying about the entire payment.

orangemomma - great plan, good luck!! One step at a time! You can do this! About your student loan. Call the lender! Especially if it is a federal loan. Hopefully that is what they are. You can have your loans put into deferment, or even have a repayment plan/variable payments based on your income. I have had mine wayyyyy too long (will be paying them off, lump sum in full after selling a property this year.. 20 years of student loans)! However, whenever I have been stuck, they put my payments on hold, no questions asked, and saved my credit. You have to address those first. Any defaults on federally backed loans can keep you from passing background checks for employment or even getting financial assistance if you ever need it! They will help you, give them a call.

kindofcrunchy82 - excellent plan! Looks good!

wolfcat - looking good as well! I have also eliminated all those non-essential things long ago. I did add netflix for tv entertainment (along with a tv antenna). I haven't watched any shows in years, so all these old repeats are new to me! Can't beat $8 a month.

AFM - I moved to AZ out of necessity, it helped me get money saved, got every bill paid off, was able to FINALLY really put significant money away for retirement over the last 3 years. No regrets! But I don't like it here so I am going to move back to where I once was! I have a home here I will be able to rent out and fully cover the payment (and a have a little extra), so it is a good investment for the future as well.

I am actually signing for a pretty significant home mortgage right now. Unfortunately, that is just the price point where I am moving (if the loan gets approved). I am hoping I will have extra $$ to buy down the rate even further. My quality of life and that of a future child will improve with the community setting as well, so its a non-tangible benefit I feel is justified.

Even though I have "made it," all those years of doing ok, yet somehow still having to count change (ugh) has me with a chip on my shoulder, feeling I am never quite caught up. But maybe that is a good feeling to always keep?
 
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#8 ·
Popping in to say hello...."hello":D

DH just finished school (wooohooo....it's been a 4-5 year journey). We put him through on cash, but had to borrow from our savings to make the last couple of months work). That should all be able to be replaced this month since he got a full time position right away (woohoo again!)

After this month we'll continue plugging away at BS 4/5/6.

With DH being in school (and buying a house and having a baby) our income has been so sporatic over the past few years. I'm really looking forward to the stability that having him working full time and getting a consistent income will bring to our finances. We've got a budget made up to reflect our current circumstances, but I'll be going on maternity leave come spring, so it will be changing yet again. We'll have to find the right balance of retirement savings and mortgage pay-downs. I'd love to see our monstrous mortgage gone, and DH would like to see our retirement savings caught-up/grown, so we'll see how it all works out!
 
#9 ·
Wolfcat, it sounds like you're in a unique situation with having no mortgage, but still having to deal with random repairs and debts.

It sounds like you've got a lot of the details worked out to get you on the right path though.

Are you and your partner both working?
 
#10 ·
Yeah, we bought the house from my parents who wrote off a huge chunk of it as a wedding gift.
He works evenings full time; I work morning part time and do some baking during farmer's market season, plus I'm an author.
 
#11 ·
Wolfcat, this may be a silly question, but may I ask why/how you aren't current on your bills and debts? It seems like there's lots of income with few expenses (or at least no rent/mortgage is HUGE), but I know everyone has a story.

Are you just starting DR?
 
#12 ·
DH and I both made a lot of financial mistakes in our early adult years. I had an ex that put me 14k in CC debt, for example.
The rent/mortgage thing just ended in Dec, plus we are paying half of the legal fees to transfer the title.
Last summer, both kids had minor surgical procedures which maxed out our medical deductible.

We've been making barely more than our expenses for a long time, so it takes a while for each extra to get paid for.

Also, I should note that half the reason for buying the house is that the payments were actually LESS than a two-bedroom apartment would be to rent. And half of what we WERE paying still needs to be saved for taxes/insurance.
 
#14 ·
I am so rusty on the Financial Peace system, I bought a kit off ebay for myself and DP. I am really struggling with wants vs needs etc. DP and I would like to get married in the next 12 months but we both have decided we don't want a courthouse wedding. I know with the right strings pulled we could have a nice wedding for very little. We are active in a church and I am friends with the pastor and his wife, one of the ladies at church is starting a photography business, one is hoping to start a baking business, my uncle is a dj, Essentially we could have a nice wedding for about 2-4K including paying everyone and of offering a meal with a small reception at the church I just am torn about saving up money for a wedding while still carrying student loan debt and needing dental work etc. Both DP and I have had previous marriages and neither of us went into debt the first go around so we would like to continue that tradition. We would like to have a lavish wedding but since we are pretty much handed all the tools we need to have a modest wedding at the church I think is would be silly of us to try and pull off something expensive. I also don't want to stress about all the details etc like I did with my first wedding. I just want to buy the dress, set up thing with people coordinate the layout of the food and show up for the wedding lol. We thought about renting a hall but in reality having it at the church and giving an offering will give us much more freedom as far as clean up etc. Just a lot of decisions right now financially for us!
 
#15 ·
Just within the first day of the DR FPU I realize I am going about this all wrong. I am keeping way too much in savings while in debt. I have on average 5-6K right now. I have committed to put a part of that directly to my debts in addition stop putting money in savings every month and increasing my monthly debt snowball amount from 400$ to 600$ per month minimum. My total debts stand at 8100$ and I have now made it a personal mission to get them paid in 12 months or less. I think I just had an ah ha moment.
 
#16 ·
Goals For February:

Step: BS 2

8002.00 in debt
Plan

Pay off State loan (200.50)
Pay off Fed loan 1: 588$
Minimums on Fed loans 2,3,4 and Credit card

Get started on FPU at home kit, on a low/no spend challenge for february. February is budget made and I am hoping to stick with it this coming month! January has been well, I haven't eaten out at all so far this month, it has been better than most given the month after christmas!
 
#17 · (Edited)
kindofcrunchy82 - seems like you are making some excellent progress. I imagine that it was difficult to take that money out of savings to pay off the debt, but you have already proved to yourself that you CAN save - so once debts are paid off - I bet you are back to saving plenty!
For me, I have serious trouble saving these days because of my ridiculous debt - nobody to blame but myself :)

So my progress for January was discouraging but here were my goals with my comments:

Goal 1: pre-baby step 0.8 - getting current on all of my bills. There are only two that I am behind on. One I will be able to straighten out and get current by the end of January. The other is a student loan that I am significantly in arrears on. -I was able to get current on the first bill, so yay for that! The second is the student loan and I was not brave enough to even deal with it this month. I have set up payment plans with them in the past and have not been able to follow through. I have done all of my deferments and forebearances allowed by law. I have no other options except to pay it and I just can't see how at the moment.

Goal 2 : baby step 1 - fully funding my baby EF. The goal to fully fund that will be the end of January also. - My Baby EF is currently at $285.04 - so goal not achieved yet here either.

I do want to add that I paid off the following debts so that felt pretty good:
$4 overdue library fines
$36 borrowed from a family member

I will post tomorrow with my goals for February
 
#18 ·
In February, I will be working on BS 0.8: Getting caught up on bills.
We'd fallen to partial payments on some things (stupid student loans), and working on medical bills. Our total debt is about $3500, so not too bad. We should be caught up by the end of the month with everything but the medical bills. I'm hoping we get at least $4k back from taxes, which would take care of that, but with all the tax laws changing (stupid congress), I'm not holding my breath. Either way, what we get back will be sent out in bills paying. So that should be done by the end of March. By then, I'll have a good start on the EF as well.
 

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#19 ·
Goals for February:

pre-baby step 0.8 - getting current on all my bills. This month I will deal with the student loan situation by sending them some money. Not sure how much but will send some. It will not make me current but I will feel like I am attempting to get a handle on it - instead of hiding my head in embarrassment/shame/insert awful feeling here.

I will continue to work on funding my baby EF - the amount at the end of February will be at LEAST $500. This is definitely something I can do.

I will also pay off 2 small loans from family members. I know this is out of order but I find it way more motivating than funding the baby EF. It's going to be what keeps me going with DR.
 
#20 ·
woohoo I paid of my state student loan today! First student loan paid off ever!

I plan to pay 288 toward my next smallest loan this month and the minimums on a everything else. I moved 300$ over to savings, currently I am looking at about 500$ in known medical expenses in 2 weeks. I also ended up at a walk in clinic over the weekend and the dr reccommend a ct scan which my insurance doesn't cover until after I meet my deductible. So I could potentially be looking at 500-2000$ in medical bills in the next few months so I am going to slow down on the debt repayment until my health is in the clear and save up for the 1-2 procedures I need.
 
#21 ·
kindofcrunchy82 - CONGRATS on paying off that first student loan! That must feel good. Sorry to hear that you are now facing health issues and high deductibles :-(

I finally got brave and called the student loan folks - they want X amount of dollars from me per month. WAY more than I can afford. I offered to pay half of the amount each month and made good on that by paying that amount yesterday for the month of February. They are sending me some kind of forms to fill out and after I fill them out and submit them, they MAY allow me to pay 1/2 of X per month. Or not. But it does feel good to finally be dealing with this - although if I can only send 1/2 of X per month I will never get past DR's pre-step 0.8! Oh well

I paid off a loan to a relative in the amount of $121

My baby EF is up to $325.04
 
#22 ·
kindofcrunchy82 - CONGRATS on paying off that first student loan! That must feel good. Sorry to hear that you are now facing health issues and high deductibles :-(
Thanks!

Revised payoff:

I paid 188.89 on Fed loan 1 for february. I feel it is the calm before the storm in regard to medical bills, I am going to check with the finance dept at the hospital to see if I can get a discount on my bills after insurance. (I got the ct scan and they found a large nodule on my thyroid so I now need an ultrasound to see how likely it is cancerous) I am unsure how that works but at minimum I can get on a payment plan for may upcoming bills.

All my debt bills are paid for the month of february...

March goals:

Pay off Fed loan 1= 400$
Pay minimum on fed loans 2,3,4= 98.00 total
Pay minimum on credit card 26$
Put rest of extra money (300$ ish) in savings for upcoming medical bills.
 
#23 ·
All bills, caught up. CC paid off in full. Big purchases made. Savings plans in full effect. House transferred to my name. Just need to get the insurance on the house going and we are gold.
 
#24 ·
Dave would not be happy, but in the midst of BS 4/5/6, we just bought a new 2015 car on a payment plan :duck.

I'm hoping it was the right choice. We've just had beaters to get us by for the past 8 yrs, and our sinking funds get drained into repairs. Our thinking was, that in buying new, even after it's paid off, we'll still have a reliable vehicle and be able to actually save for the next one.

DH also got a job with a 30minute commute, we needed something bigger for our 3rd babe on the way, and we'll be able to travel locally without worrying about our vehicle.

So, we're breaking the rules and trying something new. Hoping it doesn't bite us in the bum.
 
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#25 ·
Dave would not be happy, but in the midst of BS 4/5/6, we just bought a new 2015 car on a payment plan :duck.

I'm hoping it was the right choice. We've just had beaters to get us by for the past 8 yrs, and our sinking funds get drained into repairs. Our thinking was, that in buying new, even after it's paid off, we'll still have a reliable vehicle and be able to actually save for the next one.

DH also got a job with a 30minute commute, we needed something bigger for our 3rd babe on the way, and we'll be able to travel locally without worrying about our vehicle.

So, we're breaking the rules and trying something new. Hoping it doesn't bite us in the bum.
sounds like you are pretty far along in your baby steps, congrats!

I am just so depressed right now. These medical expenses are likely going to hault my debt snowball for some time. Possibly til the summer or later. My dp and I have to figure out taxes and then I am going to take a stab at the medical assistance program. If I can get a few thousand dollars forgiven I would be able to make it work but without some type of help I will be living and breathing medical bills for quite some time. Luckily i do have usually 500$ extra per month that i can snowball and instead put into my medical bills. Thus far I haven't seen any high bills but I am watching my account like a hawk and the ct scan just came in at 2500$. I am nervous yet know I will get through this, one bill at a time... I have a consult with a specialist for a biopsy on my thyroid on monday.
 
#26 ·
hi all,

so my medical/dental expenses are going to be huge the next months so I am completely putting the debt snowball on hold for a while. I know dave ramsey says no new debt so in order for that to happen I have to stop snowballing and start putting all my extra dollars in to these more pertinant things. I have my biopsy in one week for my thyroid. I have some money saved for the dental work but I am waiting for the estimated cost...I am guessing about 1500$ for the first round of treatment and my kids are going to the dentist this saturday and my ds hasn't been since he is three so i am hoping he won't need too much done, hoping nothing at all. Anyway, we need to get healthy this year and that will have to be a number one priority right now.
 
#28 ·
Lots to comment on in your post @Metasequoia!

First, I can't remember all that DR says about debit cards vs credit cards. It's been too long. All I know is that when someone jacked our number from our debit card and used it, it was not handled the same way as a CC dispute was handled. Since it was relatively small numbers (around $300 as the thief was still testing the waters on a bunch of piddly online item purchases) we didn't have major issues. However, we were already pretty advanced in the plan and decided we had enough discipline to switch to a CC for the protection it gives. I will ask my DH about the details, I'm sure he'll remember better as he handled most of it.

As far as your unique situation, no judgment on my end. I do think the DR plan is geared toward a married asset type situation, or single. The main reason is it can be a nightmare from a living together perspective to divide up assets and nothing is ever really joined. However, I suppose that can be beneficial, as well. If I were you (and I'm not, so it's not as if I'm telling you what to do!) I would probably move forward with my own finances completely separate from what your DH (using your terms here for simplicity) is doing.

For example, it may be a good time to have some kind of "Honey, I'm really excited to get my money in order for now, for the future with the kids and for the long term. Can we talk about this?" Then, it's a matter of deciding (and perhaps writing down for consistency and planning) who covers what expenses/extras, etc. and coming to some type of agreement, so that you can separate out what you are obligated to do yourself, and begin getting yourself fixed up absent of his input. If he doesn't have the money for one of his obligations one month, you should be building an emergency fund in which to care for it, as well as bring it to his attention that he's not meeting his end of the agreement.

Then, you can begin working to save what you have for the future. If what you are saving is minimal because he's making the money, that's OK, it's better than what it is now! If he essentially gives you money to take care of bills, groceries, etc., then you can certainly budget that money and include some type of overage for savings.

I agree with you that saving for retirement is important..my husband and I don't quite put the same level of importance on it as DR in the form of ensuring we have TONS of cash. We have a different lifestyle than most with all of these children, and our priority is not being a burden to them, not traveling to Europe to live a high life. We don't believe God has ever said to raise your kids and then spend a bunch of time and money on yourself..but that's just us. We also don't save for college for a myriad of reasons which were discussed on another thread that people didn't care much for my take, and that's OK too..it's our choice.

As far as investing, my husband is in charge of that. As a CPA, he's very wise with money and I know we have some investment accounts that are geared towards short, middle and long term savings and investing. We don't get really deeply into all of that, as our goal with DR was never to wealth build (we differ from DR a bit there in our take on what being a Christian means) but rather to live without debt to anyone else, and to save and live on a cash basis so we can have more disposable income/freedom and take care of ourselves as we age without our children having to spend their money on us.

That's our situation, and if I missed any specific questions, I apologize, just let me know and I'll be happy to help. I'm sure the other mama's here all have their own unique situations and takes, as well!
 
#29 ·
@MyFillingQuiver, I think we're on a similar page. :)

My instinct has been to move ahead with my finances separately. It could change somewhere down the line, but DH is not being wise in his organization so I'd rather not have my name attached at the moment! I'd still like to help him as his mood is greatly affected by the state of his finances, but as I said, I have to wait until he's ready (which is really frustrating because I'm a much more organized person!) Somehow, even though I could only pay my minimum balances on my CCs, I had excellent credit - I was never once late on a payment in my life. It really stunk to throw it all down the tubes, but it is what it is and I guess a credit score isn't as important as we thought it was.

When I filed for bankruptcy, I thought I was doing something for both of us because if I brought that amount of debt into our relationship (in marriage), it would become our debt. I'm choosing to look at it as a clean slate. :)

Like you, I don't envision us taking off to Europe and spending our money wildly (though I would love to travel!) I don't want us to be a burden to our children, but I want us to be a support system for them throughout their lives.
The relationship I have with my mom has turned out to be mutually beneficial. She helps us out as we share her home. She goes to Florida with my sister for 5 months a year and we hold down the fort, so to speak. When my Dad died, his finances (and everything else) were a total disaster. My parents did not have good communication. My Dad handled all of the finances and boy was he a disaster when it came to money! I felt like a private investigator after he died, sorting through his bills, trying to figure out where some of the debts had originated as they'd gone through the hands of so many collection companies. To this day, I think his financial stress killed him. This is not what I want for myself OR my children when I die.
Now I take care of my mom's finances, taxes, insurance, medical, etc. and keep everything clear and simple for her to understand.

The best thing to come of all of this (my bankruptcy and now reading TMMO) is that I can now teach my children about money! I've been spouting off bits and pieces of the book as I read it and I think they've already picked up that credit is a bad, bad thing.
I know my daughter's high school offers a personal finance course and I feel very blessed to have this knowledge before having suggested she take it as I now know it could all be very bad advice!
@MyFillingQuiver, have you looked into the course geared toward adolescents? Is it only available in certain school settings or is it available online? I'd be thrilled if she could take it at a brick and mortar location!

I'd love to hear how any of you have started teaching your children about these principles.

I think, having not yet filled out the work sheets, that my view and Dave's view on the amount that should be budgeted for food is going to vary quite a bit. I definitely put more importance on the quality of our food that most people and my budget is going to have to reflect that. Hopefully, our healthcare needs (or lack thereof) will also reflect that.

I guess I'll take things one step at a time, as Dave suggests and do them in order. When I actually get to the point of having money to invest, I'll reevaluate my personal situation.

One question on what you would do: Do you really think I should list the piggy bank debts before the one $1300 CC debt that's eating up a lot of interest? If I lump all of the piggy bank debts into one sum, it would come after the CC debt....
 
#30 ·
@MyFillingQuiver,

One question on what you would do: Do you really think I should list the piggy bank debts before the one $1300 CC debt that's eating up a lot of interest? If I lump all of the piggy bank debts into one sum, it would come after the CC debt....
I'm not sure how DR would advise on this, but IMO and experience, we have to be flexible enough to do what is right for our own personal situation. For example, our budget for certain things is ALWAYS going to be skewed differently than someone with one or two kids. It's just a different lifestyle. So, while we are ultra low on some budgetary percentages, others are higher..it all balances, and our needs are all met.

In your case, if you have personal borrowed money from essentially yourself (it belongs to the kids but you get my point) and I would really think along the lines you are thinking...pay yourself back last. No interest. I don't think deviating from the snowball is usually wise, but in the case of lumping them back with separate pay off's for each individual coming after interest, it makes sense.

We got our children the DR set of books. Dh and I 100% agree with all the principles, but have some minor-ish issues with some of it, so we want to make sure we implement the strategy without following "DR" persay..make sense? For example, I would never personally go to work to pay off our debt during those lean times because it isn't the fault of my children we had student loans and car payments..why would I essentially turn their lives upside down for debt?? So, for us, we just hammered away a little more slowly. We also don't agree with funding college accounts, or extreme wealth building for the sake of wealth. Security? Independence? Yep.

We do not give allowances at all. The children do chores each morning because they are part of a family unit and they will contribute. There are always opportunities to EARN money through doing other things, and as they get older, even more opportunities. Once they get to be about 6 or so, we have them divide up money they earn or are given into savings, giving and spending. When they are little, the spending is pretty much the whole make up, and then we increase it to better ratios. They give the money to God when we go to church. When they get a bit older we open a savings for them. Our oldest bought his own car via this method, helped finance a semester at Bible college (we contributed the other money because he was under 18 and it was a great opportunity) and has a good savings going for his adult life. So far, the kids understand debt and car payments and the pitfalls of that type of "appearing" like one has money when all they have is debt. It's working out. Tough lessons, as just about everything else our family does, it's not like everyone else!

If they get invited somewhere like a party, we buy the gift (they are still kids for crying out loud!) and we pay for things like if they go somewhere with a friend, but when they are older they are expected to contribute to things such as any junk food they may want to buy when on an outing with someone, etc. :)

I think you are doing a good job moving forward and recognizing all this, and I think you are going to be very successful! I'm excited to see how things go. Keep me posted, you can always PM me with any other questions in case I don't see this. I am certainly not an expert, but experienced and successful with the plan to the point where my husband and I just don't worry much about money.

Blessings my pregnant friend! :grin:
 
#32 ·
I have fallen off the gazelle intense train lately........... I have been feeling discouraged and when I get discouraged I spend money. Less than $60 but still. I gotta get back in the groove. Will report my progress (or lack thereof) soon.
 
#34 ·
hi everyone, I am still trucking along:

March is coming to an end and here is where my money went:

Minimums on credit card, and fed loans 1,2,3,4 = 143$ total
dentist for the majority of my work and my kiddos: 1586$
Dr bills: 75$

My dp: Paid 200$ for his kids dr/dentist bills
Paid off his cc: 250$


For april:

I need to pay approximately 560$ in medical bills
450$ in the remaining dental bill

Dp:
Has about 350$ in old medical debts he plans to settle

Took about 1000$ out of savings for everything and used the extra income I usually snowball for the dental/dr bills

Biopsy came back negative! dr still wants me to have surgery. Debating putting it off for some time though. He said long as it is within 3 months or so I should be fine.

Best of all no new debt! Dp and I are paying off debts as fast as they come in. Hoping to get snowball going again soon!
 
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#35 ·
Hi All!

kindofcrunchy - how did it go with paying down those medical bills?

Updating here: BS1 is at $672.61 - yea on that!

I am not completely current on all bills. Some of them yes, others between 30-45 days late.

I am still trying to sort out my federal student loans. They have been asking for documentation on various things so I have been showering them with papers. Hoping that they will lower the monthly amount to 1/2X that they originally quoted me.

Hope everyone is moving along with their steps and goals :smile:
 
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