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Old 01-23-2012, 06:44 AM   #1
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Dave Ramsey Support Thread Jan 23rd - 29th

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

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 01-23-2012, 06:54 AM   #2
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Re: Dave Ramsey Support Thread Jan 23rd - 29th

So I've been following Dave for almost 2 years and just now decided I should read Total Money Makeover. I bought it for my new kindle partly with swagbucks so it cost me all of $4, and if anyone wants to borrow it when I'm done, send me a PM. I know I can lend books, but I've only had the kindle for a few weeks so I'd have to figure out how.

Most of the stuff I knew, I've been listening to him for quite a while. However I didn't realize he advocates saving for a house down payment as part 2 of BS3 if you aren't already a homeowner. I was planning to make it part of our BS6. I'll have to think about that. We desperately want out of this house, it's in such bad shape, and my parents keep saying they're going to fix it up, but very little gets done. The rent is very cheap though, which makes it ideal for saving for a place of our own. But I also want to get going on retirement......decisions decisions. And one I'm going to have to make soon, as the FFEF is going to be half done by the end of the month unless murphy strikes.
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Old 01-23-2012, 07:02 AM   #3
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Re: Dave Ramsey Support Thread Jan 23rd - 29th

It's payday week for me! I only get paid 1x per month, so I definately am looking forward to this week. My budget for next month is done. I'm really excited this month because once I get paid I can go shopping for my bff baby shower gift (that's already sitting in my on-line cart) .

I have a DR page a day desk calendar (that was cheaper on Amazon than on Dave's site ). Today is something new (to me) so I thought I'd share:

My rule of thumb is that that total value of all of your vehicles - I'm talking about cars, trucks, boats, jet skis, motorcycles, and anything else like this - should not total more than half your annual income. Why? Because all of these kinds of things go down in value. You never want half of your income going into things whose values are dropping like a rock!
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Old 01-23-2012, 07:27 AM   #4
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Re: Dave Ramsey Support Thread Jan 23rd - 29th

Becca, I would LOVE to borrow TMM!!! Ive been trolling ebay for a cheap book but I kind of dont want to add yet another book to my already huge stack kwim?

AFM Im still plugging away at BS 2. I found out Feiday the check I thought I bounced resubmitted and cleared so I wont have to deal with that. I still havent found out why it didnt pull from the savings tho. Im trying to decide what to do with our tax return......still havent even started on it yet but just trying to get prepared kwim? Hubby wants to put it in the rainy day fund whereas I want it to go to a cc.
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Old 01-23-2012, 07:33 AM   #5
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Well this is a long two weeks because we got paid on the 12th but not until the 31st. So we still have over a week until payday. That being said all the bills are paid for this month and i havent touched the $225 in ef. I have gone through our whole grocery budget so we are eating out of the pantry/freezer. This isn't so bad minus not having fresh fruit. We have canned though so we will make do. We are on a no out to eat challange yhis month but we did end up going to mcds on sat. I had packed a lunch for our day trip yo my dd1s choir festival but all i had made was sandwhiches. Well we ended up bringing home one of the boys and neither he nor my dd had eaten all day. It was 3 so we ran through mcds for them. It is a fail but considering i usually budget and $200 to out to eat/fast food a month and we only spent $15 im still happy. We are planning on extending our challenge for three months but only for fast food. That will take me through my pregnancy and if we do well we will make it a challenge for the year.
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Old 01-23-2012, 07:45 AM   #6
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Re: Dave Ramsey Support Thread Jan 23rd - 29th

Quote:
Originally Posted by bluecandi View Post
Becca, I would LOVE to borrow TMM!!! Ive been trolling ebay for a cheap book but I kind of dont want to add yet another book to my already huge stack kwim?

AFM Im still plugging away at BS 2. I found out Feiday the check I thought I bounced resubmitted and cleared so I wont have to deal with that. I still havent found out why it didnt pull from the savings tho. Im trying to decide what to do with our tax return......still havent even started on it yet but just trying to get prepared kwim? Hubby wants to put it in the rainy day fund whereas I want it to go to a cc.
Wwdrd??
I'd split it so you're both happy.
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Old 01-23-2012, 07:55 AM   #7
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Re: Dave Ramsey Support Thread Jan 23rd - 29th

If anyone wants to read DR's entre leadership - I have it. I have the ebook version I can lend out or I can send the hardcopy FFS if someone wants it.

AFM - My goals this week are pretty simple. Anyone else wnat to share theirs?

Stay out of the stores.
Research coupons / cheap things to do while in vegas
Eat meat or dairy only 2-3 meals this week (more a health goal than anything, lol..but it will help keep grocery costs down!)
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Old 01-23-2012, 07:58 AM   #8
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Re: Dave Ramsey Support Thread Jan 23rd - 29th

Quote:
Originally Posted by bluecandi View Post
Becca, I would LOVE to borrow TMM!!! Ive been trolling ebay for a cheap book but I kind of dont want to add yet another book to my already huge stack kwim?

AFM Im still plugging away at BS 2. I found out Feiday the check I thought I bounced resubmitted and cleared so I wont have to deal with that. I still havent found out why it didnt pull from the savings tho. Im trying to decide what to do with our tax return......still havent even started on it yet but just trying to get prepared kwim? Hubby wants to put it in the rainy day fund whereas I want it to go to a cc.
Wwdrd??
Sure you can borrow it. Once I'm done reading it I'll figure out how...

Dave would say you should put it in your smallest debt. The point of his program is extreme levels of focus, so unless your BEF is down some money (less than the $1000), it should all go on the debts, smallest to largest. Once you have your debts paid off, its much easier to fill up the FFEF. I'm amazed how fast ours is going up, we should be able to put a full grand or more at the end of the month in.
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Old 01-23-2012, 08:03 AM   #9
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Re: Dave Ramsey Support Thread Jan 23rd - 29th

Candice - the tax refund should go to a cc, unless like Becca said you have less than $1000 bef.
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Old 01-23-2012, 08:07 AM   #10
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My goals for the week is to not go over budget. Keep ef at $225 (next paycheck we will be putting same amount in. Trying to get ef back up to $1000 so we can get our remaining $5000 debt paid so we can move onto next step. )
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