MARCH 2017 Dave Ramsey support and chat thread

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

  1. KmmCo

    KmmCo Well-Known Member Trader Group

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    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

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    March's everydollar budget is copied and just needs a little adjustment to be finished up....

    For February: Income +$130.89 (sent $47 out on Extra House Payment 3/1 and the remainder will be sent out on 4/1 payment.) I should have some additional $$ on the next paycheck, since it will have the holiday pay for presidents day on it.

    Budget: $168.11 less spent than budgeted. This includes $99 less on food (mostly restaurant category) and $46 less on transportation expenses. This money is going into my savings account. This is a great motivator to keep my spending down and not actually use all my budgeted money up....
     
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  3. amber g

    amber g Well-Known Member

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    $365 under budget this month. My husband did not spend a lot of his budgeted lunch money, his company footed the bill for his lunches quite a bit this month. That went straight to savings to save for our tax bill.

    After our most recent house payment mortgage pay off is $78244.45. This was super motivating to see, and has given me an extra boost to keep costs down and get back to putting money toward my house. Still need to get my vacation fund squared away too.
     
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  4. KmmCo

    KmmCo Well-Known Member Trader Group

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    Got my Feb rents from the ski condo - $1600+ after expenses :D. Just sitting on the $$ till after ski season. I want to fix up the fireplace and eventually replace the appliances (stove, built in microwave) in the kitchen.

    Anyway, I figured out that I will have my mortgage paid off in about 3 years if I can add $300 a month to the payment, so I am looking at some more ways to add to the payment. I cut $250 out of March's savings account goals that I am sending that direction. $150 of it is from the Feb budget savings and another $100 from an automatic monthly after tax stock investment that I am scaling back a bunch. I will only deposit $18.11 from Feb budget leftovers into my long-term savings account. I figure if I kill the mortgage faster, then I can start really building up savings quickly by putting most of my mortgage payment into savings....
     
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  5. amber g

    amber g Well-Known Member

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    That is my thinking exactly on the mortgage payments and paying off my mortgage sooner. I have a decent amount in savings so instead of putting more in savings I feel like paying it toward the house makes more sense. The only thing I am making sure to do is if I take money out savings I pay it back to keep it at the same amount.

    After refinancing several years ago to a 10 year loan, our pay off year is 2023. That is if we pay just our regular payments. My goal is to have it paid off in the next 3 or 4 years, so by 2021 would be great. Then extra money could go into savings.
     
  6. KmmCo

    KmmCo Well-Known Member Trader Group

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    I still have my 3o year FHA loan from 2007. According to the amortization chart we have actually paid off 20+ years and have 9 years & 4 months left. I am just gonna throw every penny I can at it until it is done! Once the house is paid off and I reach age 56, then I have the option to "retire" from my current job at reduced pension :D and can find something part time. (as long a DH works until he is 60 and can collect his full pension.)

    Since I am 54 already that is only a couple of years away. Not exactly the early retirement that I had envisioned, but Part-time till 60 will work for me... I wish I would have saved more when I was younger.

    Both the stupidest and the smartest thing we have done is to buy this house we live in. I paid 210K for it and then right afterward the bubble burst and we were upside down on it. I really struggled financially for a long time with the huge house payment and too much consumer debt. All my debt except the mortgage is now gone and I have rental incomes coming in from the condo and our old house (both of which are paid off). Now the value on this house has increased to 350K and the market is still hot, hot, hot here... I paid 65K for our old house (back in '87) and could sell it easily at 210K if I wanted too. My condo even has about 30K increase in value in 1.5 years....:)
     
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  7. amber g

    amber g Well-Known Member

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    That is great!! My husband and I bought our house in 2005 for $187,000. When we signed the contract to build it we had no kids, but then we found out almost immediately after we started I was pregnant with my first. 12 years later we are still there with 3 kids. It is a decent house, not my dream home by any means. The kids rooms are small which I think bothers me the most. 12 years later we could afford more, but the thought of having my house paid off by the time I am 50 sounds better than starting over in a more expensive house. Luckily we have great neighbors who we have become really close with and that also helps keep the desire to move down.

    We have actually refinanced twice. Once from a 30 to a 15, and then from a 15 to a 10 year loan. My house payment is pretty high, and that sucks, but it also forces me to have to pay the higher amount. Although I think if I would have found my frugal ways back then and the budgeting there would be no need to have refinanced.

    My husband and I were together 9 years or so before we had kids, I really wish I knew then what I know now. I think we would be in an even better financial situation. Definitely would of started saving more, but all things considered we are on the right track. We are completely debt free except for the mortgage.

    Such a fantastic return on your properties. Doing rentals is something hubby and I talk about maybe once our house is paid off.
     
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  8. KmmCo

    KmmCo Well-Known Member Trader Group

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    Couldn't stand the thought of not adding to my individual IRA, so I took $300 from my rental $ account and deposited it yesterday.

    Both my heat bills for this house and for the KS house were $20 lower than last month, so I cut $40 out of those budget items and diverted it to my vacation account for this fall. :)

    Got my Fed tax refund by direct deposit, still waiting on the tiny ($38) state refund which will come by check. The fed refund is spent for property taxes, but that little check will probably go to my extra mortgage or else just get deposited into savings. *** If you got a giant refund like I did last year, remember to look at adjusting your W-4 so that you have the money in your paycheck instead of giving the government a free loan.**** My check had $100+ a month too much held out in 2015. I fixed it and my refund was a lot smaller this year.
     
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  9. amber g

    amber g Well-Known Member

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    I transferred $200 into my savings, I think I should be set to pay my taxes now, although we have not finished them completely. I decided starting in April to start transferring over $100 into savings. I have been using and then putting back, then using and then putting back. Might be nice to have a cushion in my savings above what I am comfortable with for the things that have been popping up. I really hate to take money away from my Vacation and House funds but it seems like the sensible thing to do.
     
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  10. amber g

    amber g Well-Known Member

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    I now have $2529.69 in my vacation/Christmas budget. The goal is $6000. That is for a weeks vacation for the family to Colorado this summer, a weekend trip to Branson this summer, and to pay for this years Christmas. Hubby should be getting a bonus in the next month that will put a good dent in that. My goal is to get that fully funded so the rest of the year the extra money can go toward the house and retirement. I really want to see about finding a financial planner to talk to because I really don't know the smartest thing to do for extra retirement.
     
  11. KmmCo

    KmmCo Well-Known Member Trader Group

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    March budget results: $245 less in expenses. $125 of this was from changing insurance coverages and the rest from the other monthly expenses. I was under $50 in gasoline - didn't do much driving this month at all. I did spend the majority of my food budget with a stock up trip last week, but today I only had to spend about $4 at the store for milk and bread:).

    Since I didn't factor in the condo rents into income when I do my spending plan - I am plus $1300 which is sitting in the business account. This is after the $300 IRA contribution that I pulled out earlier in the month.

    I did send the planned $250 off with my April house payment as extra principle payment. Balance is at $111,984. House payment going up a big $2 with the escrow adjustment on May 1. I think I can handle that! I was expecting much worse....
     
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  12. amber g

    amber g Well-Known Member

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    March was not my best month budgeting. Did not go over, but I did not have any extra to put away like I normally do. That being said my husband got a $2322 bonus this check that went into our vacation fund. Plus I did put some budgeted money in that account as well. Goal is $6000 (this covers a family week vacation to Colorado, a weekend in Branson and fully funded Christmas for this year) I currently have $4690 in that account.

    Back on track for April and even better my next door neighbor and good friend has now started a budget. We are both already coupners and rebaters, but having the extra budget stuff to bounce off each other I think will be extra motivation for me.
     

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