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Old 10-27-2016, 12:03 PM   #1
twood80
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Dave Ramsey/Budget/Debt Free fall/winter chat thread

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 deductibles 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 that 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!

Rules of thumb:
House - Buy a home with a down payment of at least 10% on a 15-year (or less) fixed-rate mortgage. Limit your monthly payment (mortgage, insurance, property tax) to 25% or less of your monthly take-home pay.
Car - The total value of all of your vehicles (things with a motor in them) should not be more than half of your annual income, because they all go down in value.

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

Some good quotes for motivation...

"If broke people are making fun of your financial plan, you’re on track." -Dave Ramsey

"Whenever you find yourself on the side of majority, it is time to pause and reflect." -Mark Twain-

"What can you do when you have no payments? Anything you want!" - Dave Ramsey

"Debt is dumb, cash is King, and the paid off mortgage has taken the place of the BMW as the status symbol of choice" - Dave Ramsey

"People often say that motivation doesn't last. Well, neither does bathing—that's why we recommend it daily." — Zig Ziglar

"We buy things we don't need with money we don't have to impress people we don't like." - Dave Ramsey

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Old 10-27-2016, 12:34 PM   #2
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Re: Dave Ramsey/Budget/Debt Free fall/winter chat thread

Thanks for the new thread! I finally sold some diapers so now have navigated how to bill on PayPal, print shipping label and mail!
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Old 10-27-2016, 04:20 PM   #3
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Re: Dave Ramsey/Budget/Debt Free fall/winter chat thread

Thanks for starting a new thread.

Dh & I set up a Roth IRA for me and him. We will end up putting more than 15% in retirement with them and his work 401k. We are in our late 30's so we feel like we need to get more on the ball than someone that is younger.

We finally got our budget somewhat organized after our move. It's been a transition since lots of our expenses changed. (Plus baby on the way and we putting money aside for that)

We hired a lawyer to do our will and I keep procrastinating getting all the stuff to them. (It's a friend so they don't mind) Dh and I keep going back and forth on things. I personally think we should do a trust to pay expenses including college. DH want's things split based on years till 18. That would mean my son who is almost 14 gets very little while new baby gets more than both the other kids.
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Old 10-28-2016, 10:15 AM   #4
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Re: Dave Ramsey/Budget/Debt Free fall/winter chat thread

I poked my head in on the summer thread but have really been stressing about money lately so I am going to try to be more active here. I love my husband but I married into A LOT of debt. Being a stay at home mom I hate the feeling of not being able to contribute financially to help get us out of debt. I am currently working on paying a little extra towards our smallest credit card (Home Depot) but we dont have a lot extra to give. We end up racking up our other credit cards because we have so much debt. Its a never ending cycle. I dont know if I will have much to say on here but I will be reading to hopefully get some inspiration.
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Old 10-28-2016, 11:28 AM   #5
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Re: Dave Ramsey/Budget/Debt Free fall/winter chat thread

I'm taking a pay cut and working more hours at my new job that I start next week. It will mean that instead of working 2-3 jobs I can work only 1. I will be taking a 1k loss between the jobs. so its all ok. and it will be at a school so benefits are available. I should still be able to work the pool job during the summer and occasional sub hours.

plugging away on the medical debts.
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Old 10-28-2016, 07:33 PM   #6
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Re: Dave Ramsey/Budget/Debt Free fall/winter chat thread

I haven't been on DS much for several months but am going to jump back in here, could definitely use the help of this thread to keep us on track and sticking to our budget, especially over the next couple months when there is so much pressure and opportunity to spend.
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Old 11-05-2016, 02:54 PM   #7
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Re: Dave Ramsey/Budget/Debt Free fall/winter chat thread

I looked at our retirement investment returns is summer, and haven't been pleased with the results for years. Finally had the mental energy to start with thorough self education, and the goal is to get DH on the same page for what changes to make before our annual meeting with our investment advisor (so we know whether we keep them or go off on our own). Had discussion part 1 with DH, and he's on board with moving from actively managed funds to index funds. Now we've got to find time to discuss asset allocation.

What do you ladies do?
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Old 11-05-2016, 05:09 PM   #8
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Re: Dave Ramsey/Budget/Debt Free fall/winter chat thread

We use index funds as well. You can totally do it yourselves!! I'm actually not sure what our asset allocation is. But dh and I read a ton on the boggle heads site. It's a wealth of info.
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Old 11-06-2016, 10:39 AM   #9
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Re: Dave Ramsey/Budget/Debt Free fall/winter chat thread

We've barely done anything on retirement. I've gotten some minimal stuff from past jobs (a pension that the company stopped) and am now on the teachers retirement for the state. I haven't invested myself and am way behind the curve (in my 40's). It stinks but it is what it is.

We're trying to save and I can't find the account information for our online account. We moved and I have no idea where the information went. Which also made me realize I should've put it in the filing cabinet instead of leaving it out. It's somewhere. We still have many unpacked boxes as we're In a smaller space so can't put everything away.
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Old 11-28-2016, 10:05 AM   #10
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Re: Dave Ramsey/Budget/Debt Free fall/winter chat thread

Dh upped his retirement contribution by 4% so he is now at contributing to his works 401ks (one regular one ROTH) at 10% of his income. I will keep at 6% for now. Both places match only up to 6% but we feel that we don't get the money into retirement unless we have them move it for us. That's why we upped his retirement contribution instead of starting a IRA.

This year we've paid off 3k in medical and have an additional 2500 to go. We wanted to get 2k put away for medical expenses instead we've been paying medical debt with it. We have not paid off our lawn mower, but we have 8 months prepaid at current rate of pay off we have 5-7 months go.

We were not able to complete our 2016 resolutions for savings nor paying off debt. How about you?
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