Dave Ramsey and being a SAHM - Mothering Forums

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#1 of 14 Old 12-29-2007, 06:07 PM - Thread Starter
 
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Dave Ramsey's opinion about being a Stay-at-Home Mom or Paying Off Debt?

QUESTION:
Heather and her husband have $40,000 in student loans. She wants to be a stay-at-home mom, but her husband wants to get the student loans paid off before she stays home. What’s the right thing to do?
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ANSWER:

I want you to stay home. You should live on your husband’s income for one year, use your income to pay off the student loan in that year, and then stay home with your kids.


Thoughts??? Anyone else follow Dave Ramsey's plan WHILE being a SAHM?
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#2 of 14 Old 12-29-2007, 06:08 PM - Thread Starter
 
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Here is another Dave Ramsey financial post about being a SAHM:

Dave Ramsey on SAH

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LETTER 1
Tonya would like to become a stay-at-home mom. She writes: "WHAT SHOULD MY HUSBAND AND I CONSIDER BEFORE DECIDING IF I CAN AFFORD TO STAY AT HOME?"

Ramsey points out that you actually have to make pretty good money to be able to be a working parent: The costs of daycare, work clothing, and "convenience foods" such as lunch out and prepared dinners really add up. When you stay home, a lot of these costs disappear.

If you want to stay home, Ramsey suggests trying to live only on your partner's income (minus the cost of daycare, which can still come from your income if needed) for a few months. This will give you both an idea of what it would be like financially if you did quit working, and would enable you to prove to yourselves that you can do it.

Ramsey finds that there are a lot of working moms who would really like to stay at home and, often, there is only a car payment standing between them and the life they want.

"Don't trade a car for a kid," Ramsey warns.

Put it this way: Most couples realize they are willing to cut their lifestyles in order to live on one income. Ramsey suggests selling the car and buying a used one that you can pay for up front. See if there are other big bills or expenses you are willing to forgo.

Remember, you don't have to be debt-free to quit working. As long as you are working toward paying off your debts and managing your other financial responsibilities, don't feel guilty about becoming a stay at home parent.
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#3 of 14 Old 12-29-2007, 09:40 PM
 
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I'm a SAHM while we're working on a Dave Ramsey get out of debt plan. It's HARD! Especially since my husband's income alone puts our family under the federal poverty levels for a family our size. I have a little bit of child support that brings us just above the poverty level. But we don't really FEEL like we're that bad off, because we've made it such a habit to avoid spending as much as we can. We have lots of hand me downs and shop second hand a lot. I cook at home most of the time. We rarely buy brand name anything. And we homeschool to avoid private school costs.

We put any extra money toward debt, including Christmas money and tax refunds and birthday money. We do "group" Christmas gifts all the kids can enjoy, like a telescope or a basketball hoop, and we do lots of simple or homemade gifts for others.

Anyway, if I had realized when I was going to college the burden those freakin' student loans would become, I would have gone slower, paid my way through, and possibly still be in school. I'd much rather be debt free than have the degree, now that I see the impact each has had on my life. Not that I don't value education, or that I don't want the degree, but I would have rearranged the way I did it, KWIM?

Wife of one and mom of five, including my HBAC twins!
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#4 of 14 Old 12-29-2007, 09:48 PM
 
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I think he's right about the costs of daycare, fuel to and from daycare and work, clothes, convenience food, etc. That said, I have 4 kids under 5yo, so the cost of daycare stops us from even considering a job for me.

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#5 of 14 Old 12-29-2007, 11:51 PM
 
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Quote:
Originally Posted by Spring Flower View Post
Ramsey finds that there are a lot of working moms who would really like to stay at home and, often, there is only a car payment standing between them and the life they want.

"Don't trade a car for a kid," Ramsey warns.
This was exactly a part of our plan. I ran the numbers and realized the car payment was putting us over target. So I focused hard on paying off our car loan while I was working and TTC and was able to get that out of the way.
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#6 of 14 Old 12-30-2007, 01:57 AM
 
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I find his advice interesting but for me and many women I know if we followed it we'd be homeless. I would think the debt to income ratio would have to be somewhat low already for his plan to work.

I also agree with christyc and the student loan problem. If I had known that student loans would be the majority of our debt I"d never would of gone to school in the first place or I"d taken way longer to get it done.
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#7 of 14 Old 12-30-2007, 02:00 AM
 
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I agree with him.

Nicole, mom of 3. Mitochondrial Disease.: Epilepsy
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#8 of 14 Old 12-30-2007, 02:21 AM
 
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We are following the Total Money Makeover plan, but I am working from home doing part-time childcare.

Midwife (CPM, LDM) and homeschooling mama to:
13yo ds   10yo dd  8yo ds and 6yo ds and 1yo ds  
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#9 of 14 Old 12-30-2007, 05:36 AM
 
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But he also doesn't say that it necessarily will work for everyone. My parents for several years HAD to both work. There was just no way around it. But for a lot of people, if they are willing to make a few sacrifices, it works. I am a SAHM. I have in the past worked part time, but for the majority of it, the kids went with me to work. I just did seasonal work that was only in the evenings and a couple weekends a month. Was nice because it gave us some extra money to take care of some things and while it changed some routines (kids don't like it so well when daddy puts them to bed, for some reason), the kids got to spend more one-on-one time with their daddy, which I think was good for them all.
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#10 of 14 Old 12-30-2007, 10:45 AM - Thread Starter
 
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#11 of 14 Old 12-30-2007, 11:05 AM
 
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I believe that in the Frugality and Finances forum you will find the Dumping Debt with Dave Ramsey thread (ongoing), and many of us are SAHM's.
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#12 of 14 Old 12-30-2007, 05:03 PM
 
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Well, I am a SAHM and we never seem to get anywhere as far as getting rid of debt. We're working on it, but it seems we just never get anywhere. But we have hardly put anything on the credit cards, so haven't been accumulating more debt, which is a step. It really is hard to do. Last year my husband cut extra fire wood and sold it for some extra money. We cut corners wherever we can, but it is still really difficult.
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#13 of 14 Old 12-30-2007, 05:40 PM
 
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I posted in the spin off poll thread as well but I'll get more into it here.

At our highest our debt was probably 65% or our combined income. We worked VERY hard to pay it off. At first we lived in a very cheap and yucky apartment (before kids). We drove an older car etc.

When I stopped working our debt was probably about 55% or our new income (aka DH's salary).

The most important thing I've found as I went through the program and watched others go through it as a coordinator is that it only works if you and your spouse are in 100% agreement on all of your goals. That doesn't mean you agree 100% on your monthly budget. But if you agree on your goals and both work diligently to get to them it IS possible to become debt free.

It might mean that you have to supplement the income for a while (daycare, PT work at night/weekends) whatever. I had to do it. I took on daycare kids during the day. My DH had to support me by doing more aorund the house.

My husband left a job he loved to a higher paying one (that thankfully he ended up loveing). That took sacrifice as he had to take classes and get certifications and I had to support him emotionally.

Now we have a healtier marriage - no more money fights - more communication - bonding over working toward common goals. And for the first time EVER we have money in the bank and we are prepaired for an emergency.

The best part... we are able to give to others like never before.
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#14 of 14 Old 12-30-2007, 08:39 PM
 
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We sort of follow Dave Ramsey and I have been a SAHM for over 18 months. Yes, it is hard, but we're focused. Not that intense gazelle focus Dave likes to talk about, but we're pretty focused! We pay close to $500 a month to our debt above and beyond our normal bill payments. DF works his butt off at his regular job AND makes money on the side so that I can stay home and we can get ahead at the same time. It was really hard when we started, but seeing the pay off is incredible.
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