Dave Ramsey OCT 2017 Support and Chat Thread

Discussion in 'Debt Help, Management & Support' started by KmmCo, Oct 1, 2017.

  1. KmmCo

    KmmCo Well-Known Member Trader Group

    Messages:
    3,727
    Likes Received:
    928
    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 snowballwithin 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
     
  2. KmmCo

    KmmCo Well-Known Member Trader Group

    Messages:
    3,727
    Likes Received:
    928
    Boosted my traditional 401(k) contribution to 25% for the mid -October paycheck. I am gonna see if I can handle it for the rest of the year...... Trying to get the maximum tax benefit that I can manage.

    I am making an effort for Oct to cut grocery spending and use up what I have in the house. I stocked up a little at the end of Sept on some needed items that will stretch a ways this month......

    Speaking of 401(k) I realized that it has already increased it in value this year more that my what my actual wages are for this year! That folks is why investing pays off in the long run. Even if you can only start with a little at first, it just picks up speed as it goes along on its own. (all the time I was paying off debt I still put just enough in my 401(k) to get the company match - that is a no brainer to get your money doubled immediately - even if if it takes a few extra months to pay off your debt that way.)

    I am drawing out my after-tax dividends as cash to apply to the mortgage for a while. I should get a couple hundred $ in Oct that will probably get applied to the Dec payment. (The biggest one is coming as a check rather that direct deposit, so I won't get it to the bank before the Nov payment is due.) I will work on building the after-tax investments after the mortgage is gone from my life!
     
    Sherri1480 and jastwins like this.
  3. amber g

    amber g Well-Known Member

    Messages:
    213
    Likes Received:
    403
    Paid $4150 toward my principal today!!!!!!!! In September we had 3 paychecks, I budgeted with 2, the extra checks went toward principal. I also went on my annual Tunica trip with my sister. Thanks to some winnings I only spent $10 for the entire trip, meals, hotel and all. That money I had budgeted for the trip, but brought home also went to the principle.

    I realized that I will definitely meet all my goals I set for 2017.

    The first goal was to get my mortgage to under $63,000 by the end of 2017. With this principal payment principle payment and the last 3 regular payment this year we will be right under $63,000.

    Second goal was to open a Roth IRA. Well, I didn't realize at the time that $5500 was for each of us. So hubby and I both opened a Roth. We each put $1000 to start and then have contributed $300 a month each since June. That makes contributions totalling $6200 this year by the time 2017 ends. I decided to hold off trying to fully fund it in order to put extra to the mortgage. But I am happy we still will have invested over the $5500 I set out to.

    Third goal was to fund the Christmas/vacation fund for $4500- We actually added a weekend trip and saved $6000 for this fund. Trips have all been taken and I still have my Christmas money left in the account.

    Fourth goal was to make sure savings stayed in tact. Our FFEF is in tact where we like it to be, and where we started at the beginning of the year.

    In addition to meeting these goals we cashed flowed most of hubby's medical bills from his hospital stay, some we took out of savings, but that has been paid back.

    We also paid cash, for the first time, for a new to us car. Out of pocket on that ended up being about $4000 which we took out of saving, that has also been paid back.

    I would LOVE to get my mortgage under $60,000 by the end of 2017, but that may be pushing it, although I should have some additional extra money above my regular payment to put toward it the last 3 months.

    Looking ahead to next year I can't wait to see what we can do with no big medical bills, knock on wood, and no car purchases.
     
    Sherri1480 and jastwins like this.
  4. KmmCo

    KmmCo Well-Known Member Trader Group

    Messages:
    3,727
    Likes Received:
    928
    Halfway thru the month and budget is very good except for a couple of things....

    Remaining:
    $230/300 groceries
    $132/150 eat out
    $131/230 gasoline
    $61 /75 misc household
    $50/50 entertainment

    One unplanned thing was a trip to a funeral - obviously last minute emergency - it cost $270 that wasn't in the budget! I also had to buy a car battery, but that comes from my car repair/replace savings account that I add to every month in lieu of a car payment. I am so glad that I started that dedicated savings account 4 years ago. I figured out that unplanned car issues is what was causing the majority of our debt issues. Trying to save $$ by keeping our old cars running was costing us a fortune in credit card interest! Not a good thing at all.
     
    Sherri1480 likes this.

Share This Page