Reply Hey Mom! Learn more about the Gerber Life Insurance Grow-Up Plan!
 
Thread Tools Display Modes
Old 04-09-2017, 12:10 PM   #1
frugalmomof2's Avatar
frugalmomof2
Registered Users
 
Join Date: Dec 2012
Posts: 543
Dave Ramsey - Budget - Debt Free Spring 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

Advertisement

__________________
Mama to DS(9) and DD(7)
Dedicated wife to my fellow hammock-hanging, backpacking, thrifty, nature lovin' crunchy DH
frugalmomof2 is offline   Reply With Quote
Old 04-09-2017, 01:05 PM   #2
frugalmomof2's Avatar
frugalmomof2
Registered Users
 
Join Date: Dec 2012
Posts: 543
Re: Dave Ramsey - Budget - Debt Free Spring Thread

How is your Spring going?


We severed some more items!
DirectTV ($90/month) -- the early termination fee ate up a good chunk of our March snowball though...
Netflix ($8/month)
Amazon Prime ($5/month student membership)

Keeping my prepaid cell phone @ $35/month till the summer months when I am not needing it for work then will restart it in the fall.



Our big April/May goals:
1. Keep on track with budget
2. Pay off the car loan (kinda excited about this one - this eats $400 of our income every month!)
3. Drop full coverage on the car when paid off
4. Pay off store card #1 ($300)
5. Pay off store card #2 ($150)



We also need to have a quality discussion after the car is paid off about whether we are keeping it (worth $2500ish) or selling to buy a beater (I still need a vehicle to get to/from substitute jobs) and repair the air conditioning on the suburban ($1000-1500 quotes).
__________________
Mama to DS(9) and DD(7)
Dedicated wife to my fellow hammock-hanging, backpacking, thrifty, nature lovin' crunchy DH
frugalmomof2 is offline   Reply With Quote
Old 04-10-2017, 08:06 AM   #3
MamaChirpy's Avatar
MamaChirpy
Registered Users
seller
 
Join Date: Jul 2013
Location: South MS
Posts: 5,641
Re: Dave Ramsey - Budget - Debt Free Spring Thread

Quote:
Originally Posted by frugalmomof2 View Post
How is your Spring going?


We severed some more items!
DirectTV ($90/month) -- the early termination fee ate up a good chunk of our March snowball though...
Netflix ($8/month)
Amazon Prime ($5/month student membership)

Keeping my prepaid cell phone @ $35/month till the summer months when I am not needing it for work then will restart it in the fall.



Our big April/May goals:
1. Keep on track with budget
2. Pay off the car loan (kinda excited about this one - this eats $400 of our income every month!)
3. Drop full coverage on the car when paid off
4. Pay off store card #1 ($300)
5. Pay off store card #2 ($150)



We also need to have a quality discussion after the car is paid off about whether we are keeping it (worth $2500ish) or selling to buy a beater (I still need a vehicle to get to/from substitute jobs) and repair the air conditioning on the suburban ($1000-1500 quotes).


Sounds like you are doing great!!!

Can I ask.....? What car could you possibly buy for less than $2500? I'm thinking keep what you have instead of selling it.

Looks like y'all are really close to being debt free!!!
MamaChirpy is offline   Reply With Quote
Old 04-10-2017, 08:10 AM   #4
MamaChirpy's Avatar
MamaChirpy
Registered Users
seller
 
Join Date: Jul 2013
Location: South MS
Posts: 5,641
Re: Dave Ramsey - Budget - Debt Free Spring Thread

We are plugging away. We are down to

1. a personal loan (about $7500)
2. A store account (about 3000)
3 & 4. Two vehicles (one of which is sitting at a dealership trying to be sold)

We have an extra check coming but we will have to use it to repair our septic tank. :/

But still a whole lot closer than we used to be!!! We are no longer drowning and it feels great.
MamaChirpy is offline   Reply With Quote
Old 04-10-2017, 03:26 PM   #5
frugalmomof2's Avatar
frugalmomof2
Registered Users
 
Join Date: Dec 2012
Posts: 543
Re: Dave Ramsey - Budget - Debt Free Spring Thread

Quote:
Originally Posted by MamaChirpy View Post
Sounds like you are doing great!!!

Can I ask.....? What car could you possibly buy for less than $2500? I'm thinking keep what you have instead of selling it.

Looks like y'all are really close to being debt free!!!
My brother in law gets amazing deals as he flips cars, we could get a car with similar miles/condition from him for around $1k and he'd still pocket some cash. He'd help us sell the car. I don't know, I am inclined to keep it as well...

We are far from being debt free, mostly just taking it in 2-3 month chunks right now. We were debt free a couple years ago, bought our home and Murphy hit hard as DH needed physical therapy ($14k) that our insurance wouldn't cover and our sewer needed replaced and the insurance turned us away ($9k). We paid those off but we have a good chunk of consumer debt to work on after the car. However, I don't have work in the summer for me so we have a much smaller snowball come mid-June.


Still a lot of work to do!
__________________
Mama to DS(9) and DD(7)
Dedicated wife to my fellow hammock-hanging, backpacking, thrifty, nature lovin' crunchy DH
frugalmomof2 is offline   Reply With Quote
Old 04-10-2017, 03:27 PM   #6
frugalmomof2's Avatar
frugalmomof2
Registered Users
 
Join Date: Dec 2012
Posts: 543
Re: Dave Ramsey - Budget - Debt Free Spring Thread

Quote:
Originally Posted by MamaChirpy View Post
We are plugging away. We are down to

1. a personal loan (about $7500)
2. A store account (about 3000)
3 & 4. Two vehicles (one of which is sitting at a dealership trying to be sold)

We have an extra check coming but we will have to use it to repair our septic tank. :/

But still a whole lot closer than we used to be!!! We are no longer drowning and it feels great.
It's nice when you can list your debts in 4 items though! I know the drowning feeling - being able to float feels great! Keep it up!!
__________________
Mama to DS(9) and DD(7)
Dedicated wife to my fellow hammock-hanging, backpacking, thrifty, nature lovin' crunchy DH
frugalmomof2 is offline   Reply With Quote
Old 04-11-2017, 08:25 AM   #7
MamaChirpy's Avatar
MamaChirpy
Registered Users
seller
 
Join Date: Jul 2013
Location: South MS
Posts: 5,641
Re: Dave Ramsey - Budget - Debt Free Spring Thread

Quote:
Originally Posted by frugalmomof2 View Post
My brother in law gets amazing deals as he flips cars, we could get a car with similar miles/condition from him for around $1k and he'd still pocket some cash. He'd help us sell the car. I don't know, I am inclined to keep it as well...



We are far from being debt free, mostly just taking it in 2-3 month chunks right now. We were debt free a couple years ago, bought our home and Murphy hit hard as DH needed physical therapy ($14k) that our insurance wouldn't cover and our sewer needed replaced and the insurance turned us away ($9k). We paid those off but we have a good chunk of consumer debt to work on after the car. However, I don't have work in the summer for me so we have a much smaller snowball come mid-June.





Still a lot of work to do!


Oh wow! What an awesome BIL!!! I wish I had a connection like that.
MamaChirpy is offline   Reply With Quote
Old 04-13-2017, 11:27 PM   #8
katiegud's Avatar
katiegud
Registered Users
seller
 
Join Date: Jun 2010
Posts: 2,131
My Mood:
Re: Dave Ramsey - Budget - Debt Free Spring Thread

Getting back into financial shape again! Hubby took out some investment money to pay off our debts, so we've paid off the big cc and part of the others. Now we have small balances on two ccs, but no interest on either of them, a car loan, and a loan from my parents. We will be getting a tax refund that should take care of the ccs, then hopefully paying off the car and the parents in the next few months. Ultimate goal is to save up for a downpayment on a house/property when I get a job (finishing my degree in the next year or two).
__________________
Kate, wife to N and mama to K and A and 3 kitties
katiegud is offline   Reply With Quote
Old 04-16-2017, 09:54 AM   #9
drabekgirl's Avatar
drabekgirl
Registered Users
 
Join Date: Aug 2007
Location: Wisconsin
Posts: 3,083
Re: Dave Ramsey - Budget - Debt Free Spring Thread

Still plugging away at the same old debts - hospital bill is down to 1200 while the lawn mower is at 1k both are 0% interest. The hospital should be paid by the time I'm off for the summer. Personally when I had the finances i was making double pmts on the lawn mower and they would have both been paid off at the same time. Dh is now keeper of the budget thus I'm trying to get use to seeing money in the savings account at the bank (I would have transferred it over to an online savings account to gain more interest).

Both Dh and I have been making a couple hundred a month extra, but mine has went to refill my fabric stash for quilting and his to supplement the budget I think.
__________________
Heather - married to M, Mother to J & S
drabekgirl is offline   Reply With Quote
Old 04-18-2017, 10:36 AM   #10
katiegud's Avatar
katiegud
Registered Users
seller
 
Join Date: Jun 2010
Posts: 2,131
My Mood:
Re: Dave Ramsey - Budget - Debt Free Spring Thread

I just realized that June is a 3 paycheck month, so that should give us money to put into the new house fund. Where do you all keep savings? Ours is currently at a regular bank, but it's only 0.1% interest. The only savings we have really (aside from emergency fund) is just set aside for next year's taxes, so we haven't thought much about it. If we actually can start saving this year though I'd like to have a better plan.
__________________
Kate, wife to N and mama to K and A and 3 kitties
katiegud is offline   Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Copyright © 2005 - 2014 Escalate Media. All Rights Reserved.