Dumping Debt and Building Wealth with Dave Ramsey - AUGUST - Page 5 - Mothering Forums
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#121 of 145 Old 08-20-2008, 07:26 PM
 
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Good to know. I guess the main thing with using the debit card is that the money is gone before you have your product, before you get on the plane... Have you done major purchases with debit cards - like paid for vacations? (Not that we're going on any big time vacations until our debt is gone! ) I mainly use it for smaller online purchases.
I went to Dublin and London early this summer. Everything ended up on the debit card (was going to pay hotel w/ cc, but they put me on "fraud alert" even though I'd called to let them know I was going on the trip, and I couldn't use the card for the duration of my trip) - plane fare, hotel, food, ...

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#122 of 145 Old 08-20-2008, 08:49 PM - Thread Starter
 
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Answering all the questons that I missed here. lol.

I started DR first by listening to his program. Then DH and I took the Financial Peace University Class . That was $99 and we got 13 weeks of class, the TMM book, Financial Peace Revisited, all the audio cds of the class, a envelope system wallet, and a few other extras. Also we attended a Dave Ramsey LIVE event, which we got discounted since we took the class (I think it was $22 each). At the event a lot of his material was half off.
We (actually now mostly DH) now are FPU class coordinators to stay inspired.

DR recommends Identity Theft protection insurance - those concerned about using only debit cards may want to look into that. We don't have it yet so I don't know much about it. On my list.

Dave also talks about keeping that one cc "for emergencies" and he just won't recommend it. He talks about life "before cc" and how we would have to reach out to the community for assistance when needed. I know, I know. I'm just relaying what he says.... our belief that we *need* one for emergencies sometimes prevents us from thinking of other ways to reach out for help.

Anyway, we no longer have any credit cards. But I also don't have a circumstance where I may be involved in a custody issue. I'd do anything too at that point to keep my kids. Perhaps you could choose to pad your $1,000 emergency fund for that reason.
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#123 of 145 Old 08-20-2008, 08:57 PM
 
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Hey, did anyone see that FPU and DR were mentioned in the September Redbook? On their cover they have "Live well on less" and "How to ditch your debt for good." I haven't read all the way thru the articles yet.

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#124 of 145 Old 08-20-2008, 11:09 PM
 
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Awesome!

I have a question for everyone: did you all really cut up your credit cards? I only have one and it will be paid off very soon but I cannot bring myself to cut it up. Until I build up a legal EF (my ex DH is court-happy and tries to get custody every 6 mos, yet fails to pay child support : ) my cc is my legal EF after I spend my $1000 EF on legal fees. I did take it out of my wallet and never use it, but just having it available makes me feel secure when it comes to a legal fund.
Ours are really all gone.

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#125 of 145 Old 08-21-2008, 01:36 PM
 
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Sorry if I should not be posting this here, but I am curious what 'The Debt Snowball' means. We are in a bad financial situation now, but next year I think we will start doing much better & I'll want to pay off this crazy debt we've accumulated. Thanks!

Cheryl, wife to an amazing man, homeschooling SAHM to Gavin 12/03, Rhys 09/06, and Ian Aug 11, 2010.

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#126 of 145 Old 08-21-2008, 03:06 PM
 
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Sorry if I should not be posting this here, but I am curious what 'The Debt Snowball' means. We are in a bad financial situation now, but next year I think we will start doing much better & I'll want to pay off this crazy debt we've accumulated. Thanks!
you pretty much arrange your debt items from least amount owed to highest amount owed and attack the smallest amount first. You pay as much as possible on the debt you are "attacking" and the minimum on the rest. Here is an example:

Credit card balance $500, minimum payment $50/mo
Student loan balance $1,000, minimum payment $75/mo

You pay as much as possible on the cc, then when it is paid off you have freed up an extra $50/mo to attack the student loan with. Then when the student loan is paid off you have freed up an additional $75/mo meaning your "snowball" now contains an extra $125 to attack another debt with. You snowball down the line until you've paid off all debt.

Read "the total money makeover" by Dave Ramsey. Most libraries carry it. I'm reading it now and it is really easy reading - not boring at all. He explains stuff in a very easy to understand way. If your library doesn't have it try half.com they have it for great prices.

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#127 of 145 Old 08-21-2008, 04:08 PM
 
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This is the perfect place to ask that maciascl! Here's a link to get you started:
http://www.daveramsey.com/etc/cms/in...ContentID=4055

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#128 of 145 Old 08-21-2008, 04:30 PM
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According to Dave you can use a debit card w/ a Visa or MC logo for anything you can use a cc for. I have used a debit for a hotel, reserving tickets, etc without hold issues.
Same here. DH & I are about to go on our THIRD debt free "vacation" (to visit my family).

We have used our debit card each time to book our plane tickets, hotel room, and our rental car. Even Hertz "the company that doesn't accept debit cards" took our debit card.
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#129 of 145 Old 08-21-2008, 05:03 PM
 
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I thought the same exact thing. I know that with my cc I am only liable for the first $50 if it were to get stolen, but I was worried that someone could have a free-for-all if they stole my debit card and I'd have a heck of a time getting the money back. According to Dave the same protection that a cc offers has to be offered on a debit card. I've (luckily) never dealt with either situation but he swears you are just as protected with a debit card as long as it has a visa or mc logo.
I did the research in the TMM book and it says you are not liable for any charges (I thought it was $50) if your cc or debit card is stolen. It used to be that you had to report the loss of the card within 48 hours and you were responsible for the first $50, now you are not responsile for any and do not have to report it within 2 days. This changed in 2000.

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#130 of 145 Old 08-21-2008, 05:25 PM
 
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I use credit cards for travel.

Most credit cards include life insurance, damaged luggage insurance, and LDW coverage for rental cars. Because I don't have comprehensive or collision coverage on my own vehicle, I depend on the LDW coverage on my cc to avoid paying the astonomical LDW fees from the rental company. My debit card does not provide those benefits so it's worth it to me to budget for my trip and then use the credit card.

For just about everything else I use my debit card.

me, 28 & dh, 32.
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#131 of 145 Old 08-22-2008, 09:40 PM
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We had a good day today, budgeted for tickets to a waterpark/kids place and paid for them a while ago, then packed a lunch, drinks and snacks and only spent money on parking. What a difference that makes.
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#132 of 145 Old 08-23-2008, 12:36 AM
 
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Thanks for the info. That makes sense!

Cheryl, wife to an amazing man, homeschooling SAHM to Gavin 12/03, Rhys 09/06, and Ian Aug 11, 2010.

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#133 of 145 Old 08-23-2008, 07:39 PM
 
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Another question: Where on earth are these $7/month 20 yr term life insurance policies that DR keeps mentioning? I've been shopping around for DH and the cheapest is w/ AIG for $21/mo. DH is 30 and is in the best health class & we're in FL. We're looking for a $500,000 policy but we're flexible (willing to go a bit lower for a lower premium) $21/mo isn't bad but my ins will be $23/mo (for only $250,000 of coverage!) and that brings us up over $40/mo for 20 yrs.

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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#134 of 145 Old 08-24-2008, 12:27 AM - Thread Starter
 
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We had a good day today, budgeted for tickets to a waterpark/kids place and paid for them a while ago, then packed a lunch, drinks and snacks and only spent money on parking. What a difference that makes.
It feels good to have a fun day and not have to be stressed about how much money was blown.
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#135 of 145 Old 08-24-2008, 12:34 AM - Thread Starter
 
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For a 20 year policy for dh at $700,000 we pay $441 a year ($36.75). He is considered Preferred Plus. That is thru AIG (but we went to Zander Insurance to choose a company - that is who Dave recommends).

I'd love a $7/month policy. We feel pretty happy with what we have after getting hosed for so many years on a whole life policy.
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#136 of 145 Old 08-24-2008, 02:24 PM
 
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just an update:

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

BS2 Pay off all debt using the Debt Snowball
paid 1353.95 on 7/26
paid 2358.20 on 8/9
paid 1100 on 8/23

BS3 Three to six months of expenses in savings
savings is at $1500
I opted to pay off a medical credit card this month rather than put any in savings

BS4 Invest 15 percent of household income into Roth IRAs and pre-tax retirement
we invest 10% right now

BS5 College funding for children

BS6 Pay off home early

BS7 Build wealth and give! Invest in mutual funds and real estate
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#137 of 145 Old 08-25-2008, 10:53 AM
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Another question: Where on earth are these $7/month 20 yr term life insurance policies that DR keeps mentioning? I've been shopping around for DH and the cheapest is w/ AIG for $21/mo. DH is 30 and is in the best health class & we're in FL. We're looking for a $500,000 policy but we're flexible (willing to go a bit lower for a lower premium) $21/mo isn't bad but my ins will be $23/mo (for only $250,000 of coverage!) and that brings us up over $40/mo for 20 yrs.
I believe that he was comparing $125K whole life with the equivalent price of $125K of term. See page 57-59 of TMMO.

You pretty much can't get $125K of term insurance - it's not worth the company's time to write the policy up. It's a theoretical price based on a percentage of a larger term policy. And if you look at what you are getting, $250K for $21/month, that comes to $11.50 for each $125K of insurance. Factor in inflation of insurance prices since TMMO was written, and that's pretty close, right?
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#138 of 145 Old 08-25-2008, 01:39 PM
 
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Start of August:
My goal is to have the HBSC card paid off by 9/5. Today is my first day back at work since baby, and I actually came back to work a couple of days early-I'm not adressing the adoption balance, since the next payment for that will be on 9/1 when Dp gets paid. We just found out that her student loans are kicking back in this month. She was on a deferment, but because whe took the semester off for the babe, the deferment won't kick in again un til january PHOOEY! I was hoping we could use the extra 400 a month towards the snowball: Our belts will be getting super tight as of september. DD's tuition is 550.00 per month, and dp's student loans are 400 per month. WAHHH. it we could sell our house we could REALLY attack the snowball!
BS 0-done

BS1 1,000 to start an Emergency Fund --DONE!!
BS 1.1- Adoption 500/2200-sent 1st pmt, in court 8/8-600/2200 as of 8/12
BS2 Pay off all debt using the Debt Snowball

HBSC Cc-141.00 (paid 50.00 on 8/10)(20.00 on 8/21)-balance 121.00
Elan Cc-2362.92/2319.92
Working Assets Cc-3800/3700
Citi-7800/7720
Student Loans 39,000( Pie in the Sky!!)

BS3- (3-6 mos)looking forward to working on this.
BS4-15 percent of household income to retirement-not yet.
BS5 College funding for children-not there yet.
BS6 Pay off home early-Ditto
BS7 Build wealth and give! Invest in mutual funds and real estate-ditto
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#139 of 145 Old 08-26-2008, 03:04 PM
 
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This is our second month of actively following the TMM plan and I'm happy to report that we've paid off our cc debt!! It feels so good to say that! And we haven't used the cc in months so there will never be new cc debt to pay down again. Our snowball is finally growing and it feels like we're making real progress. I never thought we could do this on one income - I'm so proud of us.

Last night DH received a $50 incentive bonus from work for good performance and usually that meant we were going out to dinner. But instead he said "Looks like we're buying ourselves an extra $50 worth of financial peace this month" He is finally REALLY on board. Reading him the success stories and giving him the numbers from the book has really brought him on board. I'm excited to see where we'll be next year!

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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#140 of 145 Old 08-26-2008, 09:17 PM
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My paycheck that is normally direct deposited on the 20th of the month didn't show up. I have an email and a phone call in to the guy that runs my contract. The worst part is that I get paid once a month, so this is a month's worth of expenses.

I'm glad I have more than a month's expenses held back just in case. (I am officially on BS2 but I kept more for an EF since my job is less stable than most) Still, I'll have to use savings to pull rent and DD's tuition.

I did my monthly paperwork on time.
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#141 of 145 Old 08-26-2008, 10:50 PM
 
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**This is a little OT - but I cannot post in any other threads (like a technical support one!) - only in the 2 threads I had subbed to.

Any ideas why?

It's like the whole forum is in a sort of "read only" mode?? I think my 4 yo messed with the computer while I was logged in here! HELP! I need to be able to post!!!!

Jilian!!! That must feel wonderful!!
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#142 of 145 Old 08-26-2008, 11:04 PM
 
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OK, I had to clear cookies and now I can post...
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#143 of 145 Old 08-27-2008, 02:41 PM
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Halfway point, and it's Payday Friday!

August 1 Debt numbers:
Mastercard 2...3,798.40
Student Ln 1...3,020.25
Student Ln 2...6,842.43
Auto Loan.....10,141.62
----------------------
Balance......$23,802.70

August 27 debt numbers:
Mastercard 2...3,393.02
Student Ln 1...2,963.13
Student Ln 2...6,773.58
Auto Loan.......9,789.16
-----------------------
Balance......$22,918.89

Month to Date: -$883.81

Goal: -$2400

Balance to goal: -$1516.19

Um...yeah, I think my goal was a little lofty considering all of our expenses this month!

DH & I have decided that when we get back from Phoenix, we will focus with laser intensity on the CC and get it paid off by Thanksgiving. Or Christmas. Definitely by our anniversary.
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#144 of 145 Old 08-30-2008, 05:17 PM
 
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My DH and I are just getting on board the TMM train. We finally spilled out his huge change jar(a large pretzel barrel) and have almost fully funded our emergency fund for BS 1.
We are looking ahead at our debt snowball and wondering what would be our best bet.
We have about 18k in CC and student loan debt. We also have a 1st and 2nd mortgage on the house and another mortgage on our investment rental property.
When we started looking for money we could liquidate or things to sell we faced two options. I was given some stock that is worth about 32k that i've had for about four years. We've always said we would never touch that unless there was an emergency or maybe a dream house, etc. We also have the rental property that we could sell. We'd expect to make about $40k on the sale. Right now the rent we receive for it is about what we pay on the mortgage.
So which one would you use to pay down the debt?
the stock is with Bank of America and just a few months ago was worth 38k, now is worth 32k. the rental property is in mrytle beach, it's a yearly rental, not vacation rental, and is in an excellent location, close to the beach.
would dave say do both and pay off your mortgages and build your emergency fund even further?
we're not sure. any thoughts appreciated, erika
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#145 of 145 Old 09-02-2008, 12:04 AM
 
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September's thread:
http://www.mothering.com/discussions...d.php?t=960267

ribbonpurple.gif  "And the day came when the risk to remain tight in a bud was more than the risk it took to blossom." Anais Nin
   
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