Dumping Debt and Building Wealth with Dave Ramsey- July - Mothering Forums

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Old 07-01-2008, 11:08 AM - Thread Starter
 
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Welcome to a new month ladies! This thread is for anyone who is following the Baby Steps outlined in the book The Total Money Makeover by Dave Ramsey. New people are welcomed to join us on our journey to financial peace.

These are the Baby Steps:

BS1 $1,000 to start an Emergency Fund
BS2 Pay off all debt using the Debt Snowball
BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement
BS5 College funding for children
BS6 Pay off home early
BS7 Build wealth and give! Invest in mutual funds and real estate

Here's the link to Dave Ramsey's website:

www.daveramsey.com

You can do a lot of things on the site, including listening to his radio show.

Here's my intro: My name's Liz. I'm a homeschooling mom to four who also does part-time childcare from home. My dh works full-time outside of the home. We started the Dave Ramsey plan back in October and are currently working through Step 2.

Here's where we're at:
BS1: DONE!!
BS2:
$466 Capital One- killed!!!
$614 Van loan - killed!!!
$1091 Best Buy- killed!!!
$1770 Midwife- paid off!!!
$2184 HSBC Retail Services- killed!!!
$4249.63 Needed to get out of Truck loan- sitting in savings until we decide whether to sell it or keep it

BS3: 30000/20000
BS4: 4% at present
BS5: Not started
BS6: 2 years into our 30 year mortgage. Can't wait to kill this.
BS7: One day baby, one day.

Let's get a roll call for the month with where everyone is on the Baby Steps.

Feel free to post any questions you may have about the Dave Ramsey plan.

p1gg1e
BS1 - $2000 ( though this money will be put towards the 401K)
BS2 cc- $6000
401 k pay back - $4000
car loan 9000
handyman bill for old house $1100

rosegirl
BS1- done!!!
BS2- wrote the check last night to pay my car off (had 2 payments left)
I have a school loan, and we have 10K of credit card. Hoping to pay some on this when I get my quarterly bonus at work.
BS3-6 not started- focusing on bs2. although we do have 401K matches at work (we can only change this at open enrollment in spring and by next spring we won't want to stop contributing)

MamaVolpe
BS1 $1,000 to start an Emergency Fund: Check!
BS2 Pay off all debt using the Debt Snowball: Working on School Debt and CC Debt and Home Improvement Debt
BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement: Going at 10% Now!
BS5 College funding for children Got $500 from family to start one up with!
BS6 Pay off home early
BS7 Build wealth and give! Invest in mutual funds and real estate

thenaturefreak
almost done with BS1 and will be ready to start BS2 soon

OhMel
BS1

shanetedisaac
0-- Get current on bills - n/a
1 -- $1,000 to start an Emergency Fund done
2 -- Pay off all debt using the Debt Snowball done
3 -- Three to six months of expenses in savings done
4 -- Invest 15 percent of household income into Roth IRAs and pre-tax retirement - Required pension contribution at dh job, the remainder in a Roth IRA 15% total
4.5 Bar Mitzvah funding saving up to $8956/$21,000 (One boy done!)
5 -- College funding for children after the Bar Mitzvah's are funded - Some current funding by relative gifts. Currently:
Theodore: $5179
Issac: $3741
Harrison: $2898
6 -- Pay off home early I so can't wait to be here! - On year 4 of a 15 year fixed note $90,000 to go
7 -- Build wealth and give! --- Invest in mutual funds and real estate To be able to share will be a bessing.

mtm
BS1 $1,000 to start an Emergency Fund, done

BS2 Pay off all debt using the Debt Snowball, paid off my cc, working on dh's, owe about 5000. By current rate of repayment, should be done by Christmas!

llamalluv
July 1 Debt Numbers:
Mastercard 2...4916.35
Student Ln 1...3087.49
Student Ln 2...6843.48
Auto Loan.....10537.92
----------------------
Balance......$25385.24

Jilian
BS1: done!
BS2: pay off cc $2,000
student loan 1 $800
student loan 2 $3,000
student loan 3 $6,000
student loan 4 $32,000 (currently deferred)
car loan $11,000 (down from $20,000 after the trade)
BS3: We have a little more than the $1,000 EF but will get there when we finish snowballing
BS4: We are currently doing 10% to get DH's company match of 6%, so we're getting 16% put into 401k
BS5: Opened savings accounts for both boys this week, they each have $100
BS6: We had to get rid of our home, so no home to pay off early yet
BS7: One day!

FeelingBlessed
BS0 - Get current on bills - N/A
BS1 - $1,000 EF - need to transfer to proper account
BS2 - Pay off all debt - working on this (see below)
BS3 - 3-4 mo. expenses in savings (not yet...)
BS4 - Invest 15% (not currently adding to existing retirement savings)
BS5 - College funding (both kids have 529s funded with gifts; not currently adding to the savings)
BS6 - Pay off home early
BS7 - Build wealth + give - invest in mutual funds + real estate (we are a little backwards here - own 3 rental properties right now; will be selling one this summer; also have existing retirement accounts from pre-snowball)

smokeylo
BS 1 --> DONE! and current on all bills
BS 2-->
$4000 on car loan
$7000 Discover
$26000 Student Loan 1
$44000 Student Loan 2

lilyka
BS1 $1,000 to start an Emergency Fund - done
BS2 Pay off all debt using the Debt Snowball - done (almost done . . .I put about $300 on my credit card but can pay it off from my emergency fund and still have the $1000 in it.)
BS3 Three to six months of expenses in savings - working on it

mamimapster
BS 0-done
BS 1-400/1000
BS 2-HBSC Cc-308 left
Elan Cc-2400
Working Assets Cc-3700
Citi-7800
Student Loan ( Pie in the Sky!!)
BS 3- 3-6 mos of savings-so not there!!
Bs 4-ditto
Bs 5-Ditto

mama2naomi
BS1 $1,000 to start an Emergency Fund - DONE
BS2 Pay off all debt using the Debt Snowball - DONE (not including the student loan which is locked at 2.5%)
BS3 Three to six months of expenses in savings - Working on it: $2000/$9000
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement - DONE
BS5 College funding for children - DONE
BS6 Pay off home early - Working on it
BS7 Build wealth and give! Invest in mutual funds and real estate - Not yet

lunamama
BS1 $1,000 to start an Emergency Fund done!
BS2 Pay off all debt using the Debt Snowball paid 1353.95 today yay
BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement
BS5 College funding for children
BS6 Pay off home early
BS7 Build wealth and give! Invest in mutual funds and real estate

Midwife (CPM, LDM) and homeschooling mama to:
14yo ds   11yo dd  9yo ds and 7yo ds and 2yo ds  
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Old 07-01-2008, 11:22 AM
 
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Subbing!!

Elizabeth SAHM to 2 girls. Ive been lurking off and on here on the threads for a few months now. We just sold our house to start over again. Feeling good about it as our bills are now 1/3 of what we were paying ..plus we are closer to family.

BS1 - $2000 ( though this money will be put towards the 401K)
BS2 cc- $6000
401 k pay back - $4000
car loan 9000
handyman bill for old house $1100

BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement
BS5 Buy a home and pay off early
BS6 Build wealth and give! Invest in mutual funds and real estate

Kids are right now going to take loans that we will pay if they graduate
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Old 07-01-2008, 11:47 AM
 
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I'm joining!!! We just read TMM- and are excited. I woh right now, and we are hoping that in 12-18m I can cut back to part-time or quit!! (I am the breadwinner- so we are also praying that dh finds a slightly better job)

BS1- done!!!
BS2- wrote the check last night to pay my car off (had 2 payments left):
I have a school loan, and we have 10K of credit card. Hoping to pay some on this when I get my quarterly bonus at work.
BS3-6 not started- focusing on bs2. although we do have 401K matches at work (we can only change this at open enrollment in spring and by next spring we won't want to stop contributing)

I will update when I figure out how much of the CC we are paying off. my school loan is right at 8k- but has a lower interest rate- so we are paying the cc first.

I'm excited- and can't wait to cheer everyone on!!!!!!!!

WE CAN DO THIS!!!!!!!!!!!!!!!!!!!!!!!
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Old 07-01-2008, 12:28 PM
 
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continued subbing for inspiration :

wash.gif  Me  + bikenew.gif Dh =  broc1.gif  Dd1(9 yrs) + hearts.gif  Dd2(6 yrs) and blowkiss.gif Ds(3.5 yrs)
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Old 07-01-2008, 12:39 PM
 
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I am just starting this month so I haven't gotten to far yet. Also I am on FMLA leave and don't start getting a pay check again until next month. Right now I am living on the nice government check I got in May. That will help me last thru the end of my FMLA leave.

BS1 $1,000 to start an Emergency Fund: : Check!
BS2 Pay off all debt using the Debt Snowball: Working on School Debt and CC Debt and Home Improvement Debt
BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement: Going at 10% Now!
BS5 College funding for children Got $500 from family to start one up with!
BS6 Pay off home early
BS7 Build wealth and give! Invest in mutual funds and real estate

Livin' surf.gif Laughin' lol.gif Lovin' joy.gif - Just Me and Sammers, my homebirthin' little girl. 

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Old 07-01-2008, 01:04 PM
 
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Subbing, will be back later to update our progress

Zen doula-mama to my spirited DS1 (2/03), my CHD (TAPVR) warrior DS2 (6/07) & a gentle baby girl (8/09)
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Old 07-01-2008, 01:11 PM
 
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Another sub
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Old 07-01-2008, 02:14 PM
 
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We are almost done with BS1 and will be ready to start BS2 soon. We just got a job offer and if we take it, we can live with my IL's for as long as we want to and be able to at least double our snowball while we are there.

~Beth~
Mom to 3 sweet girls
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Old 07-01-2008, 02:18 PM
 
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Hello! I just read the book and had BS1 done until I needed to fix my car. So, that's where we're back to this month. In the meantime I paid off 1 cc (also was all car) and have set aside the money to pay the midwife this month. We should start paying off our other two ccs in September and then move on to car and motorcycle loans in the beginning of 09.

Anyone have any hints on how to get out of a car that your over/under or whatever it's called when you owe more than it's worth? My only idea has been to sell the car and take whatever we get for it and buy something used and then continue paying our loan for its remainder.
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Old 07-01-2008, 02:43 PM
 
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subbing

June did not go so well, had to use some of the EF for stuff so I'm hoping to get it back up soon. I'll update later.

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Old 07-01-2008, 03:48 PM
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Subbing and working on BS2.

Quote:
Originally Posted by OhMel View Post
Hello! I just read the book and had BS1 done until I needed to fix my car. So, that's where we're back to this month. In the meantime I paid off 1 cc (also was all car) and have set aside the money to pay the midwife this month. We should start paying off our other two ccs in September and then move on to car and motorcycle loans in the beginning of 09.

Anyone have any hints on how to get out of a car that your over/under or whatever it's called when you owe more than it's worth? My only idea has been to sell the car and take whatever we get for it and buy something used and then continue paying our loan for its remainder.
I don't think your bank will allow you to sell your car if you can't pay in full right away. That would be turning a secured debt into an unsecured one. How much will you lose? Other than saving up the money or getting an unsecured loan to pay off the balance I am not sure what to do. Maybe other people will have good ideas?
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Old 07-01-2008, 03:57 PM - Thread Starter
 
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Quote:
Originally Posted by rosegirl View Post
I'm joining!!! We just read TMM- and are excited. I woh right now, and we are hoping that in 12-18m I can cut back to part-time or quit!! (I am the breadwinner- so we are also praying that dh finds a slightly better job)

BS1- done!!!
BS2- wrote the check last night to pay my car off (had 2 payments left):
I have a school loan, and we have 10K of credit card. Hoping to pay some on this when I get my quarterly bonus at work.
BS3-6 not started- focusing on bs2. although we do have 401K matches at work (we can only change this at open enrollment in spring and by next spring we won't want to stop contributing)

I will update when I figure out how much of the CC we are paying off. my school loan is right at 8k- but has a lower interest rate- so we are paying the cc first.

I'm excited- and can't wait to cheer everyone on!!!!!!!!

WE CAN DO THIS!!!!!!!!!!!!!!!!!!!!!!!
You're doing exactly what you should be. Steps 3-6 are supposed to wait until step 2 is done. Get everything but the house paid off and then you're ready to move on.

Midwife (CPM, LDM) and homeschooling mama to:
14yo ds   11yo dd  9yo ds and 7yo ds and 2yo ds  
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Old 07-01-2008, 05:39 PM
 
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Hello, I'm Shane and we have been debt free for over a year now. We are on baby step #4.5 our boys bar mitzvah's. In June we put $1653 towards the bar mitzvah's yea!

shanetedisaac
Shane in CT:
0-- Get current on bills - n/a
1 -- $1,000 to start an Emergency Fund done
2 -- Pay off all debt using the Debt Snowball done
3 -- Three to six months of expenses in savings done
4 -- Invest 15 percent of household income into Roth IRAs and pre-tax retirement - Required pension contribution at dh job, the remainder in a Roth IRA 15% total
4.5 Bar Mitzvah funding saving up to $8956/$21,000 (One boy done!)
5 -- College funding for children after the Bar Mitzvah's are funded - Some current funding by relative gifts. Currently:
Theodore: $5179
Issac: $3741
Harrison: $2898
6 -- Pay off home early I so can't wait to be here! - On year 4 of a 15 year fixed note $90,000 to go
7 -- Build wealth and give! --- Invest in mutual funds and real estate To be able to share will be a bessing.

July is going to be a tough month for us. It is tax month. Property taxes and car taxes are due by Aug 1. We did not put enough aside each month so are short about $400. I have posted our skimpy budget below. LOL

Life Ins. 34
Retirement fund: 175
Religious fund: 350 (this covers annual dues and religious school)
Mortgage: 771.72
Real Estate Tax: 1000 (this is super high due to lack in the envelope)
Umbrella Ins: 27
electricity: 119.26
Oil: 250
Phone: 89.56
Trash: 7.00
computer: 71.41
Groceries: 369
Gas: 240
Insurance for cars: 141
Net Flix subscription: 8.00

Any money that we make over the planned budget of $3718.00 will go to our extras list. Mark will be getting a 3rd paycheck the end of Aug. We will put that with our $2100 tax stimulus check and get Theodore his orthodontics. he needs spreaders on the top and bottom.

Be well,

Shane - Homeschooling mom to three boys (12, 1-, 8) and living the open life with my husband.

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Old 07-01-2008, 06:13 PM
 
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shane- you are an inspiration!!!
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Old 07-01-2008, 06:45 PM
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Hi, I'm Michelle, mom to 3 kids. I took 2 months off from my part-time job (building superintendent) and am just getting back into the debt snowball again. We did okay for June, lots of family in town to see new babe so more eating out than I would have liked. here's to July being good for all of us!

We're a year into repayment now and its definitely harder when the rewards seem so far off.

BS1 $1,000 to start an Emergency Fund, done

BS2 Pay off all debt using the Debt Snowball, paid off my cc, working on dh's, owe about 5000. By current rate of repayment, should be done by Christmas!
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Old 07-01-2008, 06:52 PM
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OMG! It's JULY!!!!! :

We made an absolutely pathetic progress of $513.96 in the month of June.

We would have made more progress, but we had a medical bill of almost $600, and hubby had almost no OT, AND, well....we just didn't try very hard.

July 1 Debt Numbers:
Mastercard 2...4916.35
Student Ln 1...3087.49
Student Ln 2...6843.48
Auto Loan.....10537.92
----------------------
Balance......$25385.24


Goal for July: minimums on everything ($585) plus $1500 on the Mastercard to bring it down to $3300
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Old 07-01-2008, 07:45 PM
 
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well llama you did way better than us! i think it was only $200 saved last month. this month is going to be less than zero (i.e. using money). the only real emergency is my speeding ticket school ($100). but things are just...grim. i am not in a "i can do this place". i am wondering if i should/could get a job. there just isn't enough room in the budget to snowball consistently.
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Old 07-01-2008, 08:12 PM
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Originally Posted by dhinderliter View Post
well llama you did way better than us! i think it was only $200 saved last month. this month is going to be less than zero (i.e. using money). the only real emergency is my speeding ticket school ($100). but things are just...grim. i am not in a "i can do this place". i am wondering if i should/could get a job. there just isn't enough room in the budget to snowball consistently.

Who would care for your children, though? If I had kids, I would not be working right now. I only earn $240/week ($205 after taxes) and childcare costs would eat that up.

Unless you can provide childcare from your home....
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Old 07-01-2008, 08:46 PM
 
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I really need to be part of this thread. I have the book but haven't been able to read it yet
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Old 07-01-2008, 08:57 PM
 
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I need to get in on this, too! We have BS1 done, but man oh man, we need to work on #2. It's so hard to do on one income when your housing costs are high ... I am amazed at how y'all do it!
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Old 07-01-2008, 09:01 PM
 
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We made some serious progress this past month by lowering all of the bills we could lower. We downgraded from a minivan to a Civic to cut a year off our car payment and save $100/mo in payments and even more in gas. Here is where we are:

BS1: done!
BS2: student loan 1 $800
pay off cc $2,000
student loan 2 $3,000
student loan 3 $6,700
car loan $11,000 (down from $20,000 after the trade)
student loan 4 $32,000 (currently deferred)
BS3: We have a little more than the $1,000 EF but will get there when we finish snowballing
BS4: We are currently doing 10% to get DH's company match of 6%, so we're getting 16% put into 401k
BS5: Opened savings accounts for both boys this week, they each have $100
BS6: We had to get rid of our home, so no home to pay off early yet
BS7: One day!

Goals for July: Pay off student loan #1 and pay another chunk towards cc debt, then snowball down the line to get rid of the rest of our debt.

Zen doula-mama to my spirited DS1 (2/03), my CHD (TAPVR) warrior DS2 (6/07) & a gentle baby girl (8/09)
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Old 07-01-2008, 10:57 PM
 
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Quote:
Originally Posted by llamalluv View Post
Who would care for your children, though? If I had kids, I would not be working right now. I only earn $240/week ($205 after taxes) and childcare costs would eat that up.

Unless you can provide childcare from your home....
i would TRY to find something during the time when dh could watch the kids. i am looking into newspaper delivery right now. i think that is the ONLY fit thats going to work. i "work" at home and do special coupon shopping plus chores PLUS time with kids so that is the only thing that wouldn't make it feel like chopping my head off.

Quote:
Originally Posted by jennlindsey View Post
I need to get in on this, too! We have BS1 done, but man oh man, we need to work on #2. It's so hard to do on one income when your housing costs are high ... I am amazed at how y'all do it!

its really hard! i hear ya!
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Old 07-01-2008, 11:17 PM
 
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Originally Posted by lalaland42 View Post
I don't think your bank will allow you to sell your car if you can't pay in full right away. That would be turning a secured debt into an unsecured one. How much will you lose? Other than saving up the money or getting an unsecured loan to pay off the balance I am not sure what to do. Maybe other people will have good ideas?
Ahhhh, hadn't thought of that! Makes sense. What do people do?
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Old 07-01-2008, 11:36 PM
 
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I am Kim, SAH, WAH, + PT WOH mama to two kiddos. DH also works and is in school full time (working on his RN). I have been a DR fan for awhile, but "officially" started the program this past February. In that short period of time, have been thrilled to see total debt numbers steadily declining. We plan to sell a rental property this summer, so that will give the snowball a big kick in the tush!

Our progress...

BS0 - Get current on bills - N/A
BS1 - $1,000 EF - need to transfer to proper account
BS2 - Pay off all debt - working on this (see below)
BS3 - 3-4 mo. expenses in savings (not yet...)
BS4 - Invest 15% (not currently adding to existing retirement savings)
BS5 - College funding (both kids have 529s funded with gifts; not currently adding to the savings)
BS6 - Pay off home early
BS7 - Build wealth + give - invest in mutual funds + real estate (we are a little backwards here - own 3 rental properties right now; will be selling one this summer; also have existing retirement accounts from pre-snowball)

July's goals are to sell a rental house and DH's motorcycle; should really get that snowball moving!

SNOWBALL PROGRESS...

Since the official launch of our snowball on 2/15/08:
(Our payoffs include large chunks of LT debt (before ST debt is complete) b/c it was a requirement to partially pay off a mortgage with recent land sale)

Snowball - Phase 1 (BS2/short-term): $10,939.23 PAID OFF

Snowball - Phase 2 (BS6/long-term - mortgages for 3 properties, HELOC, + grad school loan): $51,422.01 PAID OFF

TOTAL PAID OFF: $62,361.24

Snowball Goal for July: break $65,000!

Kim
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Old 07-02-2008, 12:58 AM
 
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I've been doing the steps for a few months. I'm seeing some progress but of course not fast enough. Doing the written budget was a real eye-opener for me and helps me keep on track.

Here's my dealio:

BS0 get bills current => done
BS1 $1,000 Emergency Fund => done
BS2 Debt Snowball => ~ $1200 on Visa that just won't go away
BS3 goal of $20,000 expenses in savings => $450 so far
BS4 Invest 15 percent into retirement => currently 12% of gross
BS5 College funding => 2 years of tuition credits purchased, buying Year 3 with monthly payment
BS6 Pay off home early => trying to figure out how to make an extra payment a year; so far, no brilliant ideas
BS7 Build wealth => small discount brokerage account; no regular contributions yet

wild.gif  kickin' it old school
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Old 07-02-2008, 01:02 AM
 
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Ahhhh, hadn't thought of that! Makes sense. What do people do?
Dave talked about this on his show last night. He said some banks will take a note for the difference between what you owe and what you sell the vehicle for and will release the title. Their other option is to repo the vehicle in which case they have no hope of getting $$ from you and would likely not get as much for the vehicle as in a private sale.

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Old 07-02-2008, 01:02 AM
 
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BS6 Pay off home early => trying to figure out how to make an extra payment a year; so far, no brilliant ideas
You can divide your extra payment by 12 months and just pay that amount each month with your mortgage (in a seperate check). Just make sure to note that it is to be applied towards principle, not interest. It is easier to pay a little bit extra each month than it is to come up with a whole extra payment at once.

Zen doula-mama to my spirited DS1 (2/03), my CHD (TAPVR) warrior DS2 (6/07) & a gentle baby girl (8/09)
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Old 07-02-2008, 01:07 AM
 
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I've tried to do that, Jilian, but I can't seem to squeeze another $125 out of the monthly budget right now. I'm getting tiny raises in July and January so maybe that will be the source. I'm 1 year into a 30-yr mortgage and would love to pay it off in 20 or less.

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Old 07-02-2008, 02:05 AM
 
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Ok, I'm taking the plunge, as I can not stand to even look at our debt any longer!!! I picked up a part time job, and the entire paycheck is going towards whichever step we are on. I work when DH is home, so we don't have any childcare expenses. I am a full time student, but this year I will get some grant money, and that will all go towards which ever step we are on also.

BS1>>>>We have about $120 to go.
BS2 >>>Ugh, I can't even stand to look at this. Including student loans (about 10k) we are right around 48k in debt. 15K in credit cards, have one bike, one boat, and a car loan. boat and bike we owe more than it's worth. 10K is student loans. Our debt is horrible, I'm so embarassed by it, but so motivated to know we are working on it. We actually paid off a $400 CC note today (the 120 for BS1 will be paid with my next check). It does feel good to know we are making SOME progress...
BS3 Three to six months of expenses in savings
BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement
BS5 College funding for children <<<Our DS has 280 in savings
BS6 Pay off home early <<<<year 1 of a 30 yr. mortgage.
BS7 Build wealth and give! Invest in mutual funds and real estate <<<We will make it here, I know we will!!!!
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Old 07-02-2008, 07:56 AM
 
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shane- you are an inspiration!!!
Thank you, ty, ty! It is very tough around here lately and I really appreciate that comment.

Shane - Homeschooling mom to three boys (12, 1-, 8) and living the open life with my husband.

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