Any Dave Ramsey Total Makeover success stories?

[TnTWalter]

If you are in debt and have a DVC loan then getting rid of it is the right thing. If you own your DVC and you debt is well under control then keep it if you want.

Couldn't you just put it in Step 2?

I'm not a fan of any timeshare, even DVC [family of 5 so no real benefit], but if this person is, couldn't they pay it off?

Trish

 

[mickeyfan2]

Couldn't you just put it in Step 2?

I'm not a fan of any timeshare, even DVC [family of 5 so no real benefit], but if this person is, couldn't they pay it off?

Trish

It probably depends on how far debt they are in, how much they owe for the DVC and how temping owning the DVC is to them.

 

[Stein]

The program flat works. It isn't anything spectacular in terms of complexity or new ideas, just common sense and focused intensity to get big results in a short period of time.

Give it 100% effort for 90 days and see what it will do. Your lifestyle will likely change dramatically and the debt will go down more than what you can likely imagine right now.

We plan on being debt free except the house in the spring. The habits we are building are lifelong and we certainly look forward to what we can do with the rest of our lives.

 

[DawnM]

YES!

We have been doing it for a little over 18 months now.

We are now, for the first time in our lives, out of debt except for the house!

It is the most freeing thing I have ever experienced!

We had student loans, small credit card loans, a foreign adoption loan and a large car loan. All it all it totalled around $60,000.

It seemed quite overwhelming to us really and we thought it would take years and years.

Then we sat down with our budget and spent several weeks just kind of figuring out HOW to be gazelle intense.....what are wants? what are needs? what are things we would like to try and keep in our budget (we kept cell phones and cable) and what we could easily cut (grocery bill, vacations, eating out and shopping were the first to go!)

I went from spending around $1,000 or more (never really counted) for food a month when I included eating out and entertainment items. I cut that down to around $350 for a family of 5! And we eat great!

I stopped shopping at malls and stores and replaced it with limited money for garage sale shopping and thrift store shopping and found it just as retail theraputic!

We haven't been to Disney for over 2 years. It is killing me, but the bank account reminds me that it is going to be ok!

We went without upstairs a/c ALL SUMMER! We have a/c on the main floor of our house and we moved mattresses downstairs and have had a great 5 months all "camping out" on the floor of the den and living room! We will get it fixed when we save up for it.

To me, this is kind of how our grandparents lived.....if it isn't broken, there is no need to replace it. If it is broken, save up for it and pay with cash.

Our generation lives in debt and it scares me.....

We are now DEBT FREE! It took a lot of changing of our mindset but now it just seems silly to me to go buy things we don't need.

Dawn

 

[geetey]

OP, as others have mentioned, you are recording your spending. Keep doing that - do it for a couple of months so you can see EXACTLY where your money is going. After you see where your money is going, you can create a good working budget that you will allow you to make your money work for you. Don't be surprised it is takes a couple of months to truly have a good working budget.

Living debt free gives you a sense of freedom unlike anything you have known. You can do it! Keep track of every penny. Make your money work FOR you (rather than you working for more and more money). The plan is simple and it works,

 

[WDWBarb]

I started on the Dave Ramsey path one year ago this month. I remember listening to a friend of mine at work talking about the program and I picked up Total Money Makeover as a matter of curiosity. I was immediately entralled by the concept of being DEBT FREE! I was raised by parents who did very well financially but most certainly felt that debt was not a bad thing. Because of this I didn't have any real issues with owing money and having payments due each and evey month.

But then I was enlightened

I did not owe tremendous amounts of money and I didn't have any real credit card debt. On the other hand I had two car payments (I have never even thought about paying CASH for a car), a first and second mortgage and the bill for the braces, the cello for my DD's orchestra, student loans and more. When I wrote it all down I was shocked at how much I put out there each month!

So I sucked it up and got started. I talked to my DH about it (I handle the finances) and he said he thought it was worth a try. We didn't have to make too many sacrifices but we made enough.

The result is, of course, that we are now debt free with the exception of ONE mortgage!! We don't have a lot and we don't live like we're rich but we WILL be able to enjoy Christmas, a Disney vacation next spring and the serenity of NOT HAVING DEBT. I even have plans to now enjoy retirement well before I had planned.

So yes, it's worth the effort. Just be careful not to get on a "yo-yo" plan of paying off your debt and then falling back into the debt trap. This is the issue my friend at work is dealing with - he has paid off all of his debt (and made all the sacrifices) three times now and then keeps slipping back in!! He tends to celebrate paying off debt with a major purchase or vacation. Don't let it happen to you!

 

[minnie1928]

We started in Feb 2005 and have since paid off 2 new luxury cars that were purchased just before we found DR. I'm also on track to have my DVC points paid off in about 6 months. At that point I'll owe only on my house and if we roll all the payments into the house then we'll be completely debt free in about 6-7 years.

We weren't in bad shape before 2005, we were just caught up in all the consumerism. Meaning, we bought all the new video games, the high end cars, the newest techie gizmo, etc. Now, we really think about things before we buy them. Impulse shopping has stopped. Going to the mall for something to do has stopped. DR simply pointed out the obvious and reminded us that we should be telling our money what to do, and not the other way around.

With that being said, we are not gazelle intense (no rice & beans) and I don't carry envelopes of cash around. However, I know exactly how much I have budgeted for each spending category. For example, DH needed an ENTIRE new wardrobe for work (promotion). I looked in Quicken and said that we had $350 in the clothing "account" accumulated. And that's all we spent. We don't buy it unless we already have the cash for it, plain and simple.

I know that if we wouldn't have found DR two years ago that we wouldn't be financially anywhere near where we are today.

 

[mh1973]

I am just starting the program, I don't have any cc debt, although I do use my disney visa and pay it off every month. We do have 2 car payments and a mortgage. We just got one of the cars (my dh's truck) I have stopped his 401k contributions and the college fund we have started until the cars are paid off which will be in about 2 years with the extra payments and income tax and christmas bonus. I am very excited and can't wait to be debt free! To be able to bank that money that we pay on car payments and pay the mortgage off early is so exciting!!!

 

[anabelle]

It's great that you guys took the first step to write down everything that have been spending, but it's not a budget yet.

Now, you need to cut your outgoing money until you have a zero based budget - it cannot be negative.

Yes, I do realize that is part of the problem. It has to zero out. DH "budgets" for everything. I have to figure out how to eliminate some catagories so we can zero. I have started with the small stuff that I have immediate control over, like eating out and how much I spend at Target and Kroger. We have the standard CC bills, DVC and car loans. I hated buying the cars. We had two paid off cars. I will have to see if it is necessary to sell the DVC. We are stuck with the cars, we put too many miles on them with our jobs.

I read Total Money makeover and hear about the envelopes but it doesn't really explain them. Are they taught in another book?

 

[pamlet]

That's not a budget. A budget is where you decided what you're *going* to spend. Dave's method is to sit down every month and spend every dollar on paper before you turn loose of a single penny. Don't worry about next month's bills, just this month. Personally I have qualms about this method, because it doesn't seem to account for major bills that you might need to save up for (car insurance, taxes, etc.) and your $1000 emergency fund isn't going to cover all of those! But anyway, this would be the best way for you guys to start. Decide together where the money is going, and then stick to the plan. And start again next month.

We are just on step one at the moment ... actually just about to get to step 2 - so I'm not an expert on the program. I believe though that Dave does tell you to budget in your "long term" bills like taxes, etc. That money sits in the savings account until you use it - but not part of the 1000.00 emergency fund.

I am LOVING these success stories! They are so inspirational as we're just in the beginning stages!!!!

 

[disneynutt1225]

These success stories are inspirational. My DH and I had a little bit of debt before we got married due to stupidity in college, but this past year my parents had a really rough time financially (my father almost died and his business went under) and we had to pick up the pieces. We gave them all the money we received for our wedding (a little over $20,000) plus took cash advances out on our credit cards. The figure is scary, but we're intent on paying it off over the next 12-18 months.

 

[reginaastralis]

Out of curisosity, since I am thinking about starting his plan. Does Dave Ramsey say to not contribute to your 401k until you have your EF set up?

Thanks!

 

[disneynutt1225]

Out of curisosity, since I am thinking about starting his plan. Does Dave Ramsey say to not contribute to your 401k until you have your EF set up?

Thanks!

That's the gist of it, yes. I'm still going to contribute to my 401K and <gasp> still use my rewards credit cards while I'm paying my debt off. I'm modifying his plan to work for my needs, which isn't necessarily the best thing to do, but it's the best thing for me.

 

[ameraumi]

Out of curisosity, since I am thinking about starting his plan. Does Dave Ramsey say to not contribute to your 401k until you have your EF set up?

Thanks!

You should only stop contributing to your 401k if you can be out of debt in 12-18 mos. If it will take you longer then you should not stop the contributions.

We are working the plan now. I was not fully on board at first, but I am now. I am not going "gazelle" and giving up certain things (my cars and vacations being 2), but I am much happier having a budget and following it. We have paid off $7000 worth of debt so far this year and working hard to have the rest paid off in a year.

 

[anabelle]

Amy,
What book do you learn about envelopes in?

 

[ameraumi]

They were in both Total Money Makeover and Financial Peace. I thought TMMO went more in depth about them. Basically, you need to sit down and right out your budget. There should be an envelope for each line in your budget. Each pay period you should devide up your cash between the envelopes to fund them. Or others will assign certain envelopes for each pay period.

If you want a great free site to visit that follows Dave's books, you should visit http://www.livinglikenooneelse.com. The people there are great and so helpful and will answer any question you should have.

 

[ameraumi]

I also wanted to add that there is a site that has a lot of wonderful spreadsheets that members of LLNOE has contributed to: http://www.jimnkim.net/index.php?pr=Spreadsheets

 

[DawnM]

We did NOT do it this way. Whatever our companies would match, we maintained because to us that was "free money." If the company matched 5%, we continued to contribute 5%.

We did cut back for a while (from 10% to the matching 5% only), but we did not cut it out completely.

Dawn

Out of curisosity, since I am thinking about starting his plan. Does Dave Ramsey say to not contribute to your 401k until you have your EF set up?

Thanks!

 

[tonilea]

Dave Ramsey Fan Here!!!!

Financial Peace University was offered at our church in Feb. 07. I knew we had to take that class. We couldn't afford to, but thank God we did. We so sick of robbing Peter to pay Paul.

After the first class, DH and I talked. There were some things we weren't sure about or just flat didn't like about Dave's plan. I hated the idea of shopping with cash! BUT, for the duration of the 13 week class, we committed to doing it exactly as instructed. I am so thankful we did.

It wasn't easy going to the grocery store with cash, a calculator, a 3 year old and an elderly mother-in-law. For us, going to a cash system has made all the difference. (Last month, I wrote a grand total of 8 checks. Makes it really easy to balance your check book. lol)

We started out at approximately 13k in non-secure debt in 13 open accounts. Credit Card debt, medical debt, alot of small stuff. We had been on the debt free band wagon for a couple of years. Our cars are paid for, our home is paid for, but we were still struggling - making progress, but slowly. We now have less than $3900 in debt (need to update the ticker). DH works as a police officer - not a high paying field here and I work about 15 hours a week at a busy veterinary clinic. We have been blessed with opportunity after opportunity to make extra money - OT, extra jobs. We have sold things, including a few guns from DH's prized collection. We have picked up cans along the roads - pretty humbling, but it is for a purpose. We demolished an old moblile home for the aluminum. Any thing we could to make extra money.

Has it been easy. No. But, by the completion of the class, we had seen significant progress and the budget had almost become second nature. Now it is almost effortless to keep the budget.

Some will tell you that Dave Ramsey's plan is not "financially sophisticated". Heck, if we were financially sophisticated, we wouldn't be in this mess!

I highly recommend taking the FPU class. Besides our infertility treatments, it is probably the best money we ever spent.

Financial Peace is real and you can have it.

ETA: I forgot to add that since Feb. we have had several expensive emergencies that we have been able to cash flow, including car repairs and a new dryer.

 

[anabelle]

Do you all recommend the class versus the CD's?