Dave Ramsey support thread - December 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]

ended up having to use the credit card the past month,
so my goal is to have it paid in full again with the next statement.

All bills are current,
DH even got a small increase on his paycheck,
so I am hoping for a good month
and a GREAT new year!!

[cody82414]

[Kim1013]

I'm still here plugging away at BS2. We have a little over $5,000 left on my student loan and then we'll be consumer debt free. We should be able to knock this out pretty quick. DH is getting an additional bonus from the silage season since it went very well and I just cancelled my last whole life policy so whenever we get those checks in the mail, it should total ~$2500. I cannot wait to get rid of this debt!

[KmmCo]

I'm still here plugging away at BS2. We have a little over $5,000 left on my student loan and then we'll be consumer debt free. We should be able to knock this out pretty quick. DH is getting an additional bonus from the silage season since it went very well and I just cancelled my last whole life policy so whenever we get those checks in the mail, it should total ~$2500. I cannot wait to get rid of this debt!

Looks like you are doing great!

So far my progress is not so dramatic. I did get DH on board last weekend about needing a little more income for a bit. We are going to raise the rent a bit at our old house and I have been trying to pick up a bit of OT over the holidays. Even making an extra $100 or $200 really helps alot, as our bare bones budget is just too close to our income. I think I will try to get a few things listed on ebay soon too.

I am just trying to keep up with the bills and not get behind on anything! This year, I should get a little money back on taxes, so I will make an effort to file early and use the money to pay toward some bills.

[Spanelli8706]

BUMP! How is everyone doing as we're getting closer to Christmas?

[jenrose]

I just realized I never saw the December thread and I actually have good news to report.

DH set up his payment for the truck and when it comes out the truck will be paid in full almost a year early. So after that comes out this month our only debt is our house.

Now my goal is to keep DH focused and get him to start increasing our house payment a little at a time to save some on interest there. Not having a truck payment will give us almost $600 more a month to work with. If I can get him to put that entire amount extra towards the house that would be great but I doubt he will agree to that.

[xmas tree]

Just plugging along.

Maybe another year.

[Spongebear]

Im late to this thread but ive been sick since nov. So I havent done much. I made my savings goal for the yr, and paid off the smallest debt. I have one debt left to go, under 3k, then im debt free. I need to figure out another savings goal so that I can start up in January.

[cody82414]

Im late to this thread but ive been sick since nov. So I havent done much. I made my savings goal for the yr, and paid off the smallest debt. I have one debt left to go, under 3k, then im debt free. I need to figure out another savings goal so that I can start up in January.

been wondering how you've been!
good to hear from you!