Dave Ramsey support thread - September 2011

[cody82414]

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

---------------------------------------------
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

[cody82414]

Looking forward into the rest of the year is bleak to me

This month our property taxes is due
as is the orthodontic bill for DS1.

Most of the orthodontic bill should be reimbursed through flex spending,
but paying the last of these expenses has dwindled our BEF to less than $100.00

I am happy that we got all of the major expenses out of the way using our savings throughout the year
that we acquired no debt
and that we have instead paid our debt down by over $20,000 in the last 8 months
that we went on an all cash vacation this year
and that we have enjoyed plenty of extras along the way

but there is virtually nothing left now.
So time to get serious again
and try to get DH to see that using the credit card is not a "temporary way out".


So, all my best to everyone this month.
I will be looking to you all for encouragement along these days to come

[ILv2Shop]

Bleak? You should be very proud of yourself for all you've accomplished in the last 8 months. Wiping out 20,000 dollars of debt and also going on an all cash vacation is awesome. Something to be very joyous & proud about. Your also hitting the declutter pretty good too. ;) We can all see what happens when you get "serious" so have faith that you'll kick it again and accomplish more great financial moves.
Woot-woot!!

[MalloryGrace]

Hi, I'm not sure if this is the right place for this or not. My hubby and I are pretty much on with Dave's plan. We are debt-free except for...a credit card that I ran up and didn't tell dh. It's in both of our names. If I had any sense, I would have used the one in my name only but deep down, I probably wanted to "get caught." I got caught when he checked his credit score.

He was upset but not as angry as I thought he'd be. He just said that if he had done it, he would probably get a second job to pay it off and he thinks I should consider working until it's paid. I agree. It's not a huge amount, under $5,000.

Problem. I've been a stay at home mom for 18 years. I don't have any recent work experience. We homeschool, so it's not like I even did volunteer work during school hours. Nothing. I have an expired teaching certificate but don't want to teach and nobody's hiring teachers anyway.

Other problem. Dh is unemployed and might end up doing contract work. Our COBRA is going to run out eventually and I might have to get a "real" job with health insurance.

I don't want to take a job with the intention of quitting, that seems dishonest. And I might need a job in a few months anyway. Basically, if I have to work for health insurance then that's what I have to do. But if I'm working to pay off this stupid credit card I don't want to work longer than I have to.

I've done temp work, but that was back in the days of typewriters, very basic computers and when actual humans answered telephones. I looked on some temp sites and it doesn't look like I'd qualify for anything.

I applied for a seasonal position at Target, even though they're not hiring. I wouldn't feel at all bad about working for a few months, if both parties knew that was the plan.

Here's the main thing. Dh and I have parents who are beginning to show signs of dementia, possibly Alzheimer's. They're in another state. I want to visit before they forget who we are. I want to be there at Christmas. This could be dd's last Christmas before she moves out, and she wants to spend it with her grandparents. That's our tradition. If I'm tied to a job, we can't make any plans.

I know it's my fault and I feel horribly guilty about the debt. I can't even remember what I bought, nothing big. I know Dave would say to mow lawns or deliver pizzas, but in this economy people are either mowing their own lawns or have yard guys with tractors and fancy equipment who can do it quickly. A friend delivered pizzas and went in the hole by the time she paid for gas and wear and tear on her car. I don't have many "skills." If I had anything to sell, I would.

I'm ready to call my parents and remind them of the times they've helped out my siblings and haven't been repaid. Honestly, if I said, "Can I borrow some money until dh gets back on his feet? If the answer is yes I'll see you at Christmas. If the answer is no, I don't know when we'll be there" I think they'd GIVE, not lend the money. But that just seems wrong, even if I eventually paid them back. They definitely could afford it but I'm the one who got into debt, not them.

OK, if anyone has read this far can you give me any advice? Do you know any companies that hire seasonal workers? Should I see if a temp agency can help? I've thought about trying to do product demonstrations if it's a situation where I work when it's available and when I'm available. Has anyone done that? Am I overlooking any serious options? Other than, "Put your kids in school you lazy bum."

[Dengineer]

Hi, I'm not sure if this is the right place for this or not. My hubby and I are pretty much on with Dave's plan. We are debt-free except for...a credit card that I ran up and didn't tell dh. It's in both of our names. If I had any sense, I would have used the one in my name only but deep down, I probably wanted to "get caught." I got caught when he checked his credit score.

He was upset but not as angry as I thought he'd be. He just said that if he had done it, he would probably get a second job to pay it off and he thinks I should consider working until it's paid. I agree. It's not a huge amount, under $5,000.

Problem. I've been a stay at home mom for 18 years. I don't have any recent work experience. We homeschool, so it's not like I even did volunteer work during school hours. Nothing. I have an expired teaching certificate but don't want to teach and nobody's hiring teachers anyway.

Other problem. Dh is unemployed and might end up doing contract work. Our COBRA is going to run out eventually and I might have to get a "real" job with health insurance.

I don't want to take a job with the intention of quitting, that seems dishonest. And I might need a job in a few months anyway. Basically, if I have to work for health insurance then that's what I have to do. But if I'm working to pay off this stupid credit card I don't want to work longer than I have to.

I've done temp work, but that was back in the days of typewriters, very basic computers and when actual humans answered telephones. I looked on some temp sites and it doesn't look like I'd qualify for anything.

I applied for a seasonal position at Target, even though they're not hiring. I wouldn't feel at all bad about working for a few months, if both parties knew that was the plan.

Here's the main thing. Dh and I have parents who are beginning to show signs of dementia, possibly Alzheimer's. They're in another state. I want to visit before they forget who we are. I want to be there at Christmas. This could be dd's last Christmas before she moves out, and she wants to spend it with her grandparents. That's our tradition. If I'm tied to a job, we can't make any plans.

I know it's my fault and I feel horribly guilty about the debt. I can't even remember what I bought, nothing big. I know Dave would say to mow lawns or deliver pizzas, but in this economy people are either mowing their own lawns or have yard guys with tractors and fancy equipment who can do it quickly. A friend delivered pizzas and went in the hole by the time she paid for gas and wear and tear on her car. I don't have many "skills." If I had anything to sell, I would.

I'm ready to call my parents and remind them of the times they've helped out my siblings and haven't been repaid. Honestly, if I said, "Can I borrow some money until dh gets back on his feet? If the answer is yes I'll see you at Christmas. If the answer is no, I don't know when we'll be there" I think they'd GIVE, not lend the money. But that just seems wrong, even if I eventually paid them back. They definitely could afford it but I'm the one who got into debt, not them.

OK, if anyone has read this far can you give me any advice? Do you know any companies that hire seasonal workers? Should I see if a temp agency can help? I've thought about trying to do product demonstrations if it's a situation where I work when it's available and when I'm available. Has anyone done that? Am I overlooking any serious options? Other than, "Put your kids in school you lazy bum."

Have you thought about being a private tutor? Since you homeschool, it sounds like something you would be good at. You can set your own hours and either work from your own home, go to your clients homes or meet at the public library.

BTW--if your DH is unemployed, what does he do all day?

[MalloryGrace]

Have you thought about being a private tutor? Since you homeschool, it sounds like something you would be good at. You can set your own hours and either work from your own home, go to your clients homes or meet at the public library.

BTW--if your DH is unemployed, what does he do all day?

I've thought about tutoring, may look into it. Thanks.

DH is still drawing a salary (severance) from his previous job, but not for much longer. He's worked some on his own and spends a great deal of time looking for jobs. He's in IT, so he's also brushing up on certifications.

[Spanelli8706]

Looking forward into the rest of the year is bleak to me

This month our property taxes is due
as is the orthodontic bill for DS1.

Most of the orthodontic bill should be reimbursed through flex spending,
but paying the last of these expenses has dwindled our BEF to less than $100.00

I am happy that we got all of the major expenses out of the way using our savings throughout the year
that we acquired no debt
and that we have instead paid our debt down by over $20,000 in the last 8 months
that we went on an all cash vacation this year
and that we have enjoyed plenty of extras along the way

but there is virtually nothing left now.
So time to get serious again
and try to get DH to see that using the credit card is not a "temporary way out".


So, all my best to everyone this month.
I will be looking to you all for encouragement along these days to come

You paid $20,000 in debt!!!!!! That is AWESOME Cody!!!! You totally deserved a vacation after all of that work and it is 10 times better that you paid for it with cash. Your progress is an inspiration for a lot of other people who wonder if they are capable of meeting similar goals. Keep your eyes open for ways of extra cash (do any surveys??) and keep the new mindset that you have aquired... eventually you will rub off on your DH. I know that this can take a while, I've been there.

[Spongebear]

Im in for sept. Pre step 1 completed. Baby step 1 completed. I have two small debts to eliminate. My goal is to atleast get rid of one of them by the end of the year. Im also working on step 3. I have 3 months ef saved plus $1000 ef. So im doing step 2 and step 3 at the same time. I hope to bump my ef from 3 months to 4 months by the end of the year. Currently I have 64% of my goal saved.

[Spanelli8706]

Im in for sept. Pre step 1 completed. Baby step 1 completed. I have two small debts to eliminate. My goal is to atleast get rid of one of them by the end of the year. Im also working on step 3. I have 3 months ef saved plus $1000 ef. So im doing step 2 and step 3 at the same time. I hope to bump my ef from 3 months to 4 months by the end of the year. Currently I have 64% of my goal saved.

Great Progress! Happy Birthday by the way! :)

[Spongebear]

Great Progress! Happy Birthday by the way! :)

Thanks, I know im all over the place with the DR process. But I would panick if I put it all into the debt and not save.

Thanks for the bday wishes.