Dave Ramsey support thread - October 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]

Starting over at pre step 1.

Budget has to be revamped.
Letting DuH help me decide how much he plans to spend,
so I know what I have left over to work with


My best to everyone on their journey

[Spanelli8706]

Good luck Cody!

[Kim1013]

Still plugging away on BS2. Going to probably be on this baby step for another 6 months but who knows. Soybean harvest is going very well so far. We are also applying the DR steps to our farm. We hope to be a self sufficient farm in the next couple of years and then save, save, save to buy more farm ground.

[Lori63]

Still stuck in BS2. Working on it~

[KmmCo]

Got to really watch my spending this month! I should do good on the grocery budget because I have a lot still in my pantry to eat up before the holiday sales come up in November/December. I have to watch my gasoline budget closely because I may be going to see Mom the 1st of Nov and that is a pretty long trip, especially in my gas hog of a truck. The weather looks nice for the next 10 days so I am going to put off turning the furnace on as long as possible - if I close the windows at night the house should stay warm enough for a bit longer. All in all, I should be living pretty cheap for the month of October, and this is a bonus 3 paycheck month so that extra paycheck should help with the bills.

Babystep 2 is a forever process for us as I have so much debt - but I feel good that I have not been digging my hole any deeper the last couple of years.

Definitely planning cheaper vacation next year! Even though I paid cash for all of this years, I think I shouldn't spend so much and get a lot more serious about attacking those credit card bills.

[cody82414]

Good luck Cody!

Thanks!

New month,
and he just stopped somewhere to get breakfast to the tune of $18.50.

Whatever dude!

[cnholland54]

Goals for the month
Pay parents back $1000 (Ending balance $2000)
Save $400 (Car fund)
Keep spending under $400
Track spending to see where my money is going
No fast food, $10 max for the month at work cafeteria.

[cody82414]

Goals for the month
Pay parents back $1000 (Ending balance $2000)
Save $400 (Car fund)
Keep spending under $400
Track spending to see where my money is going
No fast food, $10 max for the month at work cafeteria.

Awesome!!

[sweetpickle]

I'm feeling pretty good this month! I almost have prestep 1 done hoping to be all caught up by next month! But then Christmas will be here..it may not be as big as before but maybe we can actually pay for it this time instead of nasty credit cards! (might be hard using them since I closed a lot of them to go on a payment plan!) I don't want behind on bills again..I see how much is wasted just from late fees alone.

I feel so relieved and stress lifted since trying to stick to a budget and bills caught up!!

Just wish dh would join me in this ride and just look at some of the bills. I feel good then it just seems he wants to spend money on something we don't have to have. He says I ignore him and don't find out how much it would be..maybe I am since I know how much we have to spend:) I'll do it for stuff we have to have but wants I put off as long as I can! I'm not being mean..its reality. I'd love to get the stuff he wants since he bust his butt for paycheck but he also helped us get in this situation also.