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Dave Ramsey support thread - August 2011 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
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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 deductables 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 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
"What can you do when you have no payments? Anything you want!" - Dave Ramsey
Re: Dave Ramsey support thread - August 2011 We got the property taxes for both lots paid in full
as well as the summer fill for propane $$$
Still have home insurance, winter propane and Christmas to deal with from the EBF.
Last year we ended up with $2.xx left in savings
I was hoping this year would be better,
but not sure right now
At least we did not acquire more debt.
Yet
Re: Dave Ramsey support thread - August 2011 Hang in there Cody. Try to look at it as the cup half full. You were able to pay the taxes and get the summer propane. As far as Christmas, we have found that our kids were just as happy when we had a low budget Christmas as when we had big Christmas's. Make memories instead of lots of "stuff". Start early explaining that it will be a different Christmas. Not worse, or bad, just different. We once had to borrow money from a friend (he offered) to get any gifts at all for the kids. That was horrible.
Some steps in the right direction for us:
My hubby is coming around. He asked me the other day how many months of emergency funds would I like to work toward. HUGE step for him. We are starting with a goal of 3 months and will go from there.
We have more than our 20% down payment for our house closing. So any repairs, improvements etc. will be paid for with cash. It will actually come out cheaper for us to make the mortgage payment than our rent payment. We got an amazing interest rate.
We paid my car off last month. DD's wedding is being paid for in cash. Our move (truck, muscle to move us, etc) will be paid in cash.
Insurance - we now have health insurance, dental, vision too. Dh has a small "no exam needed" life insurance policy with his new job. He will have to remain in the Army Reserves to keep his life insurance through them - well he could retire but the premium will skyrocket. He can not get a new policy written on him now.
Now that I've shut up about the budget, dh is starting to come around. Of course in about a year my student loans will come due, but we are going to pay that off aggressively too.
Re: Dave Ramsey support thread - August 2011 We finally got disability insurance for DH (I get mine through work). We got rid of our cable to offset the cost of the insurance. It came out to be pennies difference. We also increased the deductible on my car insurance so that should save us almost $50 a month. We are really moving in the right direction. DH is completely on board and we're using DR's method for the farm as well. And DH is working a LOT of overtime this month so cha-ching! On the 20th, DH's cousin is going to come talk to us and give us his speal (he just got a job as a financial advisor) so by the time we are ready for baby step 4 he should have a lot of experience and I know he'll be a good advisor/teacher. Things are really falling into place. God is good!
Re: Dave Ramsey support thread - August 2011 I want to join but not sure what this is about.
Re: Dave Ramsey support thread - August 2011 Deleted my response, bc I messed up. Confused the steps.
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Originally Posted by Kim1013 
