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Old 05-13-2016, 01:52 PM   #1
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Dave Ramsey/Budget/Debt Free Summer 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!

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 05-13-2016, 02:07 PM   #2
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Re: Dave Ramsey/Budget/Debt Free Summer Chat thread

I figured we should start a Summer thread. I hope everyone is doing well.

I'm on baby step 4,5, & 7. We are in the middle of remodeling our house. Hopefully we will have it done soon & can actually move in it. We currently are renting a house over 80 miles away from our paid for house. It would be nice to finally stop renting, paying 2 water bills, 2 electric bills, etc. We are paying cash for everything (DH does use his Home depot card but pays it off at the end of the month.) Due to driving back & forth... We are eating out more than usual since I have no fridge/stove at new house & no running water inside. (pipes being redone ... Solid copper) Our grocery expenses are up also from more convenience foods. It costs $6 for a 1/2 loaf of bread as DD & I are gluten free. So Sandwiches are not "cheap" for us. Plus drinks, snacks, etc.

The gas & car expenses are piling up too due to driving back & forth 4 or 5 times a week. We just bought new tires on the car & did $350 worth of other maintenance... Then DH fixed his truck for another $200. We are also having a worker come for 8 hours on Sat & Sunday to help with the work.

So far we have managed to stay in budget mostly. (If we go over in fuel costs .. We will be under somewhere else.)

I have a nice cushion of paypal & hope to use the $ to redo the area that will be my sewing room.
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Old 05-13-2016, 04:27 PM   #3
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Re: Dave Ramsey/Budget/Debt Free Summer Chat thread

We are budgeting now for some repairs. Have had some expenses out of the budget, but not too far off budget.
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Old 05-15-2016, 08:43 AM   #4
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Re: Dave Ramsey/Budget/Debt Free Summer Chat thread

We're on Step 2. I just made a ginormous payment to Amex and that feels so good! I still struggle with hubby. I've gotten him on board plenty of times but he always jumps off! He hasn't charged anything but it slows down our progress. We have one CC that charges interest. It's a good rate but it's still no good. I told DH it's costing us x to have that debt. He's been a little more cooperative since then.
I've started working again as a hospice nurse. Part time but that's how it needs to be til the girls get older. All my wages will pay for babysitting and cc's. Oh and taxes....since I'm on a 1099. X-(
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Old 05-15-2016, 08:07 PM   #5
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Re: Dave Ramsey/Budget/Debt Free Summer Chat thread

We are on Step 2 as well. It's hard work! Our food spending has gotten much better by there is still room for improvement. I really need to be better about planning/ prepping ahead of time to avoid the temptation of convenience foods but am just SO busy these days. Thanks for starting a new summer thread! I need the encouragement.
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Old 05-15-2016, 08:51 PM   #6
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Re: Dave Ramsey/Budget/Debt Free Summer Chat thread

We still plugging away on steps 3&4 (but we have 1 small loan for a lawn mower its interest free so we aren't paying a ton extra on it as we are trying to save). but next month my income is reduced by $200/mo, than co-worker is off on maternity leave for 3 months. I will be gaining hours until she is back (but no over time). I will also be loosing paid time off and holiday pay so the only benefit I'll have is the 6.6% retirement match.

Dh does so much better at not spending than I do. I see things we need like food and clothing for growing children and have to buy it even if its above budget. Nothing like being out of food and having no tennis shoes to wear to school.

As for our yearly financial goals I was just checking into that earlier this month and we have saved a month of savings out of the 3 we want to have saved by the end of the year. so yes we are behind. our months are 1 is long term savings, 1 is for retirement above our work match and 1 is for car repairs.

if you'd count the amount we've paid in car repairs so far this year its a 450 towards a 1k deductible due to a deer totaling the truck (used parts), and probably another 300 for other repairs to our 2 vehicles. and the truck still needs 900 in tires. the car repairs is being spent as quickly as its been saved.
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Old 05-16-2016, 03:47 PM   #7
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Re: Dave Ramsey/Budget/Debt Free Summer Chat thread

What do people like to use for tools for teaching kids, and for education for parents to teach kids? I've had recommended to me:
-Financial Peace Junior
-The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money by Ron Lieber
-Smart Money Smart Kids: Raising the Next Generation to Win with Money by Dave Ramsey & Rachel Cruze
Looking for more. Thanks.
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Old 05-16-2016, 09:12 PM   #8
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Re: Dave Ramsey/Budget/Debt Free Summer Chat thread

Quote:
Originally Posted by twood80 View Post
What do people like to use for tools for teaching kids, and for education for parents to teach kids? I've had recommended to me:
-Financial Peace Junior
-The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money by Ron Lieber
-Smart Money Smart Kids: Raising the Next Generation to Win with Money by Dave Ramsey & Rachel Cruze
Looking for more. Thanks.
I let my 13 year old listen to Financial Peace. I have not used a "junior" program. We do chores for payment (He has to do them WITHOUT me asking or no Money) I have always taken the kids grocery shopping and I have always discussed prices, sales, price per unit, etc. We discuss budgets ... like "you have XYZ in Clothing fund" etc.

Also I made my son make a fake budget... Had him have a 40 hour a week job at minimuim wage... Then he had to pay rent, bills, etc. Then I had him do the same thing at $20 a hour. he wants to go to College now!
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Old 05-19-2016, 01:16 PM   #9
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Re: Dave Ramsey/Budget/Debt Free Summer Chat thread

I'm reading "Smart Money Smart Kids: Raising the Next Generation to Win with Money" by Dave Ramsey & Rachel Cruze, and I'm surprised by their insistence that teenagers should have two savings goals - a cash car and a cash college education. Growing up, a car wasn't ever going to be an option, due to up front costs plus ongoing costs of insurance/gas/maintenance. Cars came when we finished college. Does anyone have any more insight on why from the Ramsey perspective a car is even in the equation?
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Old 05-19-2016, 02:28 PM   #10
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Re: Dave Ramsey/Budget/Debt Free Summer Chat thread

Quote:
Originally Posted by twood80 View Post
I'm reading "Smart Money Smart Kids: Raising the Next Generation to Win with Money" by Dave Ramsey & Rachel Cruze, and I'm surprised by their insistence that teenagers should have two savings goals - a cash car and a cash college education. Growing up, a car wasn't ever going to be an option, due to up front costs plus ongoing costs of insurance/gas/maintenance. Cars came when we finished college. Does anyone have any more insight on why from the Ramsey perspective a car is even in the equation?
That's so I interesting and I hope someone has an answer as a car is far down on the list of things my son is saving for.

I know he has friends that are saving for cars but they have no higher education plans so the car will be used to getting them to any job they have.

We've done most of the steps but don't follow Ramsey but are naturally Ramsey minded if that makes any sense?

I'd like to chat with other moms that are budget minded. I find it keeps me on track because we all know the rest of the world is about : buy, buy ,BUY!
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