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Thread: Dave Ramsey

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    Pet Sitter theparrisfive's Avatar
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    Default Dave Ramsey

    has anyone else tried his debt free program? my husband and I have started it... well he tried 5 years ago but i laughed at him . if anyone else has done it how did you start out? im seeing it as completely and utterly hopeless to get ahead financially. so wondering how others have started it. we have his books and dont plan on doing the classes cause well we are too cheap :/

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    Default Re: Dave Ramsey

    Have not read his books but have seen him on the news and like him. Please share your secrets once you get them. I need to be saving money now and am having a hard time.

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    Default Re: Dave Ramsey

    I have one of his books I am reading now. It seems pretty easy advice but hard to put into practice
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    We are doin it right now and in 2 yrs we are down 5k! What we did is pay minimum payments and start paying more on the lowest balance we had. We got the intreset cards paid off now we are doin our no interest so we have had to even everything out... We have so many months to pay everything off so was able to pay the interest cards off and save the no interest for last.
    Last edited by lexterwayne; 09-29-2011 at 04:56 PM.
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    Default Re: Dave Ramsey

    i just dont see where to start/ pull from to put away but his plan and what not seems like the best weve found. we did have savings then it seemed like everyone decided to sue us over medical bills at the same time :/. my husband makes around 3200 a month but we have 2800 - 2900 in bills alone not including gas and food a month :/ have a feeling its gonna be a long rideand that it will be worth it
    Last edited by LariP; 10-02-2011 at 09:28 AM.

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    Default Re: Dave Ramsey

    meant and hope its worth it

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    We haven't done the savings part first we are paying off a little so it'll be a little easier lol.. Just focus on one card at a time that will help, usually w it bein the lowest amount and working ur way up to the highest... Trust me it sucks cause we can't do nothin fun!!! But in the long run we will be debit free by hopefully feb or march of next yr only having my car which I owe 5,000 on and the house! Which of course we are remodeling house so we will have some kind of payment. Which is usually no interest. Jeff just combined our 2 credit cards together which instead of paying 2 cards we only have one payment a month. Like I said earlier I would pay off debit or half of the debit before saving, but that's just me
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    Default Re: Dave Ramsey

    Love Dave Ramsey. We're following the 7 Baby Steps that he suggested.

    On the savings - yes, it makes very good sense to pay off credit cards before saving. Because, the interest you are paying the credit card is a lot higher than the interest a savings account gives you.

    But, what Dave Ramsey proposes is to have Cash on Hand (interest-bearing savings account) of about $1,000 before starting the Debt Snowball plan. The $1,000 is NOT a savings account - technically. It's Emergency Fund. What that is - if some emergency situation occurs - car breaks down or something - you can tap the emergency fund instead of messing up the Snowball Plan. It gives you a bigger chance of success - especially psychologically - because you won't be doing a one-step-forward-two-steps-back frustration.

    So, in summary, this is how you would start:
    1.) Just like a weight-loss plan, you can't really stick to it unless you are COMMITTED to be debt-free. Yo-yo and fad diets is not the way to go. So, first, sit down with your husband and agree to make a financial independence commitment. You have to be in agreement. This is not going to be a fun thing. This is going to be hard. This requires a lifestyle change. This requires discipline. This requires work. This requires both of you to be on the same page. Just like weight-loss.

    2.) Draw out a plan of action. Follow the 7 baby steps that Dave Ramsey proposes. Take your money-in versus money-out and see what you can do to put a gap between the two - either increasing money-in or reducing money-out. That may mean restructuring credit cards (my husband moved some credit cards to lower interest or zero-interest cards and managed those cards like a hawk - there's a trick to interest-free-for-a-time credit cards - they lure you in with zero interest rates for 6 months, then charge you 24% interest if you are 1 minute late on anything - including other cards - or hope you won't be able to pay off the card in time and then charge you 24% then - so yeah, very solid management with a plan of action for what would happen next is crucial to this). Or this may mean taking on a 2nd part-time job.

    My husband and I have 2 cars - both 2003 models that we bought in 2002. We've had both cards for 9 years - we've paid them off at year 5. So, we've been car-payment-free for 4 years. Our cars are really old now - we don't even have a jack to connect the ipod or some such, so we're still playing CDs. One car still has a tape player. LOL. One car has over 165,000 miles in it. We didn't get another car because we want to keep the gap between money-in and money-out the way it is right now so we can follow through on "the plan".

    Let's say, every weekday morning you are used to stopping at Starbucks for a Latte - $4. Sacrificing that latte means a monthly savings of $80. Let's say you are used to buying 2-liter Coke every week at the grocery - $2. If you sacrifice that, that's $8 you can add to your gap. No amount is too small. Maybe you can start to carpool. Whatever way you can contribute to that gap. When you're committed to the plan, finding these little bit of money becomes a fun challenge and provides a great feeling of accomplishment.

    3.) Establish an emergency fund. It doesn't have to be $1,000. Just agree with your husband on how much money that would be. Once you get this emergency fund, then you are ready to snowball debt.

    4.) Snowball your debt. There are several ways to do it. Dave Ramsey likes the quick gratification method - that is, pay off the smallest balance first. Other advisers like the highest interest rate first. Dave Ramsey likes the gratification one because it's a psychological/emotional boost once you pay off a credit card, so the faster you can pay off one card, the higher your commitment level is. So, basically, pay minimum on all debts except for the smallest balance. Then, put all the "gap money" you have into paying off this card - the higher the monthly payment you can afford, the better! Once this is paid off, then target the next smallest balance and put all the "gap money" you have into this card. And so on and so forth. Persistence is the key...

    Now, there's no sense in paying off credit cards with one hand, then charging up credit cards with the other hand... When you start the commitment, swiping a credit card should be like sticking your hand in acid... will only do it with extreme pain...

    Start with those and the rest would be easy...

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    Default Re: Dave Ramsey

    Sounds like good advice. What's his book called? Here we have The Wealthy Barber books. Very entertaining. Teaches you to live within your means and how to control your inner spending demon.
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    Thanks anatess ! your explanation helps a lot. We sat down last night with finances and according to quicken right now we are -400 until the end of this month...so obviously we need to get stuff straightened out fast!

    We have no credit cards. We filed bankruptcy around 8 years ago and vowed no more credit cards. Its all medical bills, a student loan and car payment which has very high interest.

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    Wow - sounds like great info. I've never heard of him but definitely want to read up on him after this thread! I've been lucky enough to be blessed with good money skills (ok, it's to my parents' credit, they really taught me well) and we've been saving for about a year now. (Before that we had credit card debt due to my husband being out of steady work for almost 2 years.). I'm always looking for ways to save more!!! Part of my personal plan is that I work a part-time job, generally somewhere I shop often so as to put the discount to use. Right now it's Victoria's Secret which is not only fun but really comes in handy with a growing teenage girl!!!


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