Dumping Debt with Dave Ramsey/FPU Club - Page 3 - Mothering Forums

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Old 10-04-2007, 11:40 AM
 
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Ordering TMMO from the library today, since I can reserve books online.

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Old 10-04-2007, 12:58 PM
 
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Hello Dave fans,
I just joined the MDC community and have been a fan of Dave Ramsey for several years (I think I started listening in 2002, started the debt snowball in December of that year). My DH & I paid off all our debts by Feb 2005, minus the house, and are currently working steps 4, 5.... and when able (through bonus money or extra work), step 6.
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Old 10-04-2007, 05:43 PM - Thread Starter
 
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Hello Dave fans,
I just joined the MDC community and have been a fan of Dave Ramsey for several years (I think I started listening in 2002, started the debt snowball in December of that year). My DH & I paid off all our debts by Feb 2005, minus the house, and are currently working steps 4, 5.... and when able (through bonus money or extra work), step 6.
SO great to read success stories!! Thanks for posting.

How long did it take for you to get your budget really accurate?
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Old 10-04-2007, 05:45 PM - Thread Starter
 
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Our debt right now is at $29,695.67. I will be able to get rid of 6 debts this month which is over 1/2 of who we owe to however these are the tiny medical bills and a couple small credit cards before hitting the BIG ones, but it still gets me really motivated. Are we going to run running totals each month?
Each month, when you send off a check, whenever you feel like it! I bet you'll get the big ones paid off faster than you think since you will have 6 fewer payments each month. I'm thrilled to think about getting our car paid off, and not have to carry the required insurance on it - it'll be quite a bit of money in our pocket each month.
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Old 10-04-2007, 05:48 PM - Thread Starter
 
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Pre Baby Step 1

evansmama
Sara Badger
mimie


Baby Step 1


rosie_plus_one ($525/$1000)
Miasmamma
Nitenites
phathui5 $34.04/$1000
mrskennedy
usandthegirls
Killick


Baby Step 2


Denvergirlie 30K by July 2008
mtm 4K to date, 12-18 months left
aufilia (BS3 completed - TTC)
alleyoop $2,500 CC to go!
excitedtobeamom
angela1435
aircantu1 $16,591.54 left!!
Adamsmama
dealic $3,000 LOC left!!
gratefulbambina $29,695.67
aggie11381 $38K down $13K to go


Baby Step 6
Carrie77

Baby Step "Limbo"

beansmama
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Old 10-05-2007, 04:29 AM
 
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Thanks for posting the links for the You Tube videos, I just finished the series and feel pumped up to tackle our finances head on! I did check out Financial Peace from the library based on the enthusiasm for Dave I saw here on MDC. Even so I guess I didn't internalize much because I was preparing to go the route of Credit Counseling out of desperation. Last night I came across this thread and the link to llnoe just in time. I now feel like paying a company to help is not a smart idea and know that behavior modification is where it's at for me/us.

A question I have for you all is if it is important to keep the cc accounts open (but not use them of course) to help show long term open credit on my report? At this point we are two payments behind on 5 out of 6 cards but only two have reported me (I checked last night). We are going to sell our second car and use the money to get current, set up an emergency fund, set some aside for living expenses and buy a motorcycle for DH to commute to work. That should happen within a week or so!

Also is there any advice you can share about negotiating lower interest rates. Will they even consider that after this last irresponsible period? I'm scared to make those calls but I know I have to!

Once I work out the details of our situation I'd be happy to post them and be a part of the list, I'm so glad to be here with you all

TIA

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Old 10-05-2007, 10:56 AM
 
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Does anyone have a book they are willing to sell? please pm me
TIA

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Old 10-05-2007, 11:58 PM
 
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A question I have for you all is if it is important to keep the cc accounts open (but not use them of course) to help show long term open credit on my report? At this point we are two payments behind on 5 out of 6 cards but only two have reported me (I checked last night). We are going to sell our second car and use the money to get current, set up an emergency fund, set some aside for living expenses and buy a motorcycle for DH to commute to work. That should happen within a week or so!

Also is there any advice you can share about negotiating lower interest rates. Will they even consider that after this last irresponsible period? I'm scared to make those calls but I know I have to!
Dave says (in a nutshell) that who the heck cares about your credit score if you're not going to use credit? If you're determined to live a debt-free lifestyle, then just get rid of the credit. I'll admit, it took me a while to wrap my brain around that and accept it.

About negotiating the lower interest rates, well, it never hurts to ask, kwim?

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Old 10-06-2007, 12:36 AM
 
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That makes sense. Thanks for the reply Nitenites

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Old 10-07-2007, 12:00 AM
 
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I'll add our (long) story.

We started Nov of 2005 after a big credit scare. We moved out of a rental house and the rental company didn't return our $2000 deposit. We sued in small claims court and the company retaliated by putting false info on our credit, as in 180 days overdue on a mortage, false documents about unpaid rent and a false eviction notice. We did eventually win our case, but it took a year. We were so freaked out that our interest rates on the credit cards would go up and came to realize how stupid it was to depend on a credit rating so much. So that's how we got started.

We paid off $22K in credit cards in the first year. (I have a nice screen shot of our $0.00 balance printed out). There was a short set back when our AC died and we had to charge $6K, but 3 months later we were back on track. Final payment on the $10K student loan went out last week! Now it's the two cars at about $13K total left.

So that's $38K down $13K to go, should be done in March. It's really going to go fast here at the end.

We've also managed to just about double our take home pay since we started. I think once you start to get motivated about money, you make different decisions. I hadn't had a raise in 2 years, so I started job hunting. I was offered one at a 15% raise and was given a counter offer of a 40% raise by my boss when she realized she can't live without me. My husband went looking for a job in his field and then when he got one, started taking all OT offered. His boss likes his initiative to do the OT and he just got another huge raise last month.

We follow most of Dave Ramsey's ideas. We didn't sell our cars, but we live in a major city and have long commutes. The fear of a highway breakdown is too scary to risk driving beaters for us. We also keep $5K in savings because we have a high insurance deductibles.

We used to fight about money a little, but now our favorite topic is our budget!

So that's me...
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Old 10-07-2007, 03:26 PM
 
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Can we talk about storms on the horizen? As we are nearing the end of our school debt, we are duscussing how we will proceed about paying off the last debt (my car) versus saving for a downpayment/liquid assets.

Following the model, we would move all our payment to paying off the car, but we are concerned that perhaps that would not be the best plan. In the next while, we are going to have to consider moving out of my parents basement, either into an apartment or a house. I'd really like to have some stockpiled cash to make that transition easier. We will need a downpayment for a house or first and last month's rent for an apartment, in addition to the increased monthly expenses, as we don't pay heat, hydro, or such bills now.

We are leaning towards splitting our payments between the car and savings. Right now we put $500 to the car and $1500 to debt, and we lean towards putting $1000 to the car and $1000 to savings when the debt is gone. That way, we can dump the money onto the car if we want, but we have the security of the liquid assets.

Does an emminant move into a situation with increased expensive living expenses count as a storm on the horizen? Are we right to be concerned, and want to have cash money available to make sure we can ride the storm?

Thoughts?
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Old 10-07-2007, 03:40 PM
 
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We have been discussing that for awhile. We will finish paying down our CC debt by the end of the year, then we are going to build our emergency fund before DH pays off a business expense (work truck). DH is self employed and it would make both of us feel better if we have 3 or 6 months of mortgage payments in the bank.

You have to do what works for you. One plan cannot fit everybody because all situations are different. And only you can decide what works for your circumstances, and what makes you comfortable and secure financially. I do think that having a plan and following it works the best (at least for us), no matter what order you do things in.
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Old 10-08-2007, 01:08 AM
 
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We're now at $34.04/$1000 on BS1.

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Old 10-08-2007, 02:05 AM - Thread Starter
 
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We're now at $34.04/$1000 on BS1.
YES!! You're gonna have to give me the story on the 4 cents.
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Old 10-08-2007, 11:49 AM
 
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I had $2.24 left in my savings account (ugh). Yesterday I put in three $5 checks I got for doing surveys online and a $16 check from dh's mileage from job #2.

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Old 10-08-2007, 02:45 PM
 
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Question:

What have you done with your credit cards? Also if you did something with your credit cards what baby step were you on and how hard was it?
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Old 10-08-2007, 03:25 PM
 
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We have 3 credit cards one was mine, one was his. Then I switched which one I used, and havn't cancelled the first one. But we haven't used either of mine in over a year. We do use his though. It is easier for us to track expenses on a credit card than in cash or by debit, and we don't go overboard with it, so this works for us.

I will be cancelling one of mine, and probably the second one too. We were mostly keeping it so we had one mastercard and one visa, in case one is not accepted, but most places now accept both. We will keep his. We pay it off right away, but we earn free groceries with it, so it has perks above helping us track expenses.

We could cancel all 3 without pain, except for the added fun in booking hotel rooms, ordering online, etc. We are on the paying off debt step, but have not had cc debt for almost 2 years. However, for us they are a tool with a purpose, so we will keep them.
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Old 10-08-2007, 06:24 PM - Thread Starter
 
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Rebecca - I think it makes sense for you to split that $2000 between your car debt and getting your own place. Have you run the numbers on your income paying for the extra bills of having your own apartment?
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Old 10-08-2007, 06:30 PM
 
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Rebecca - I think it makes sense for you to split that $2000 between your car debt and getting your own place. Have you run the numbers on your income paying for the extra bills of having your own apartment?
Yes, and our income is quite sufficient for an apartment/mortgage. There isn't actually much change in Rent and Food from here, only $200 a month, as we pay for food here, and rent is only 200 more than we pay. The difference is mainly bills. But we clear $2000 a month now over expenses, so it is sufficient.

The concern is that I want to move to another area, and we may have a period where only one of us has a job. One major reason I want to move though, is decreased living expenses (read: housing prices are $150 000 instead of $300 000 for an average house) so our expenses there would be equal to here. Also, I would earn $10 more an hour there for the same agency I work for here (and group homes are easy to get into), so even if Shawn is out of work for a while, it should be ok. The main reason for the move is to be closer to my extended family, and away from the big city our small city has become.

We just had to move home once due to an untimely job loss, and I don't want to risk it again.
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Old 10-09-2007, 01:55 AM
 
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I am in i got finicial peached revisited and money makeover at the library the other day and had started reading it. did you all list every single bill you have and how much it is and then go from there for getting current on bills?

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Old 10-09-2007, 09:16 AM
 
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dealic,

I've never had any problem with ordering things online, booking a hotel room, etc, with my bank debit card.

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Old 10-09-2007, 09:20 AM
 
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dealic,

I've never had any problem with ordering things online, booking a hotel room, etc, with my bank debit card.
Yes, but do you have a CANADIAN debit card? We have problems every time we try to use our debit card in the states, either online or in person. Our system is just different than yours, and we run into nothing but problems. We've given up, we either need cash, or a credit card.
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Old 10-09-2007, 01:57 PM
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Yes, but do you have a CANADIAN debit card? We have problems every time we try to use our debit card in the states, either online or in person. Our system is just different than yours, and we run into nothing but problems. We've given up, we either need cash, or a credit card.
I can use my Canadian debit card in stores but not online. Our bank cards are not tied to visa or another credit thing like they seem to be in the States.

I paid off another $500 in Sept. By the end of Nov my main cc debt will be gone and we'll move on to tackling dh's cc next.
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Old 10-09-2007, 06:07 PM
 
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LOC down $700 to $2500! I didn't think we would be able to drop it at all this month, as this month and last had a lot of one time expenses. Next month is 3 paycheque month, so that should really help make a dent of that last little bit. For some reason, the last bit is harder to drop than any bit other than the very first bit. Its because we finally feel secure enough to make the purchases we had been holding off on until we got on our feet. But we have to remember to keep plugging at it, we still aren't in the clear.
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Old 10-10-2007, 02:33 AM
 
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re: keeping credit cards open

I actually read on the LLNOE message board that it is a good idea to keep your CC open while you are still paying off the balance. If you are considered an active customer (who may choose to use the card in the future) the CC company will be more willing to do things like lower your interest rate or waive fees. If your account is closed, the CC company really has no reason to accommodate requests for things like lowered interest rates.

Idea for online purchases: if you're not comfortable or can't use a debit card, a traditional American Express card can be used like a CC, but must be paid in full each month. Prevents the temptation of carrying over a balance (but requires careful budgeting to make sure you can pay off the balance each month).

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Old 10-10-2007, 10:07 AM
 
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Idea for online purchases: if you're not comfortable or can't use a debit card, a traditional American Express card can be used like a CC, but must be paid in full each month. Prevents the temptation of carrying over a balance (but requires careful budgeting to make sure you can pay off the balance each month).
That's a good idea. We already don't carry a balance on our cards, so we don't need the additional encouragement, but I can see a definite advantage.
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Old 10-11-2007, 12:55 AM
 
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Paid $1100 on bills today, debt down to $28992.41. Was able to knock out 1/2 our bills and now owe 7 bills left two of those will be paid off on the 15th. I was off on my original total.
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Old 10-11-2007, 12:57 AM
 
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Paid $1100 on bills today, debt down to $28992.41. Was able to knock out 1/2 our bills and now owe 7 bills left two of those will be paid off on the 15th. I was off on my original total.
YAY!!!::::
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Old 10-11-2007, 05:44 PM
 
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Finally got The Total Money Makeover from the library yesterday. Also, dh agreed to read it!

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Old 10-11-2007, 08:02 PM
 
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Just for everyone's reference. I did add in pre-baby step 1 - which I called baby step "0" and also added in BS 3b for those of us that do not yet own homes but want to.


Dave Ramsey - Baby Steps

0-- Get current on your bills
1 -- $1,000 to start an Emergency Fund
2 -- Pay off all debt using the Debt Snowball
3 -- Three to six months of expenses in savings
3b --- If you don't have a house and want to buy one, this is where you save for the downpayment
4 -- Invest 15 percent of household income into Roth IRAs and pre-tax retirement
5 -- College funding for children
6 -- Pay off home early
7 -- Build wealth and give! --- Invest in mutual funds and real estate
Thank you, I was wondering what all the steps were.

Looks like I've already done 0, 1, 3, and 5.

I'm a bit out of order, but I just now heard of this program.

I don't currently own a home.

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