Dave Ramsey Question

[Baloosgirl23]

Hi all! So, DH and I have decided to take an aggressive approach to paying off our debt. For those of you that have done the 'Dave Ramsey' thing, what worked best for you and what was the hardest part of sticking to it? We just started it this week since we're working off of our next paycheck and it's SO HARD already! I just don't know if I can do this, although my DH is all about it so I'm on board. We made the decision for me to be a SAHM too since all of my income was going to pay for child care but I feel like I'm not doing my part financially. Any help would be greatly appreciated! TIA

 

[elle bell]

Having a budget lined out each month has really helped. I no longer stress when big bills like car insurance come up because I've budgeted for it each month. I now know where every cent of our income goes each month and all impulse spending has stopped. It's such a liberating feeling! Once you get a clear idea of what your budget should look like, it gets much easier. Ramsey says it could take up to three months to get an accurate budget for your income and expenses, so don't get discouraged in the beginning.

I'm a SAHM too. Try looking at your financial contribution as the money you are saving by not sending your children to daycare. You can also earn money here and there by selling things you don't need or use any more on Craigslist. We recently sold $200 worth of old textbooks on Amazon and I've also started selling baby equipment and baby clothes at local consignment sales. Every little bit helps.

We started doing Dave's plan in May 2009 and so far we've paid off our car loan 6 months early. We still have two student loans to pay off, but we've put our snowball on hold for now, while we save up for a used car for me (we only have one car right now). I'm so excited to pay cash for a car and hope to never have a car loan again!

Good luck!

 

[KimFIGFern]

I have not done the FP workshop ... or read his books (yet ... I have one ordered at the library). But I found a great website that works like this one (it was actually referred by someone on this board). It is great for all around sound financial support ..

http://www.livinglikenooneelse.com/

 

[minnie1928]

Having a budget lined out each month has really helped. I no longer stress when big bills like car insurance come up because I've budgeted for it each month. I now know where every cent of our income goes each month and all impulse spending has stopped. It's such a liberating feeling! Once you get a clear idea of what your budget should look like, it gets much easier. Ramsey says it could take up to three months to get an accurate budget for your income and expenses, so don't get discouraged in the beginning.

Totally agree!

We just marked our 5 yr anniversary on DR this month. At the time we had no CC debt, but had 2 financed BMWs in the driveway. We focussed on our debt and paid them off way early. During this we bought our DVC contracts (we thought long and hard on that!). Financed them for 10 years, paid them off in 2. We now are massively saving money for our fully funded emergency fund and retirement.

I too am a SAHM for the time being. I view my contribution to the family's finances as it's my job to make sure we don't over spend. I power shop with coupons, hit CVS for the deals, make meals at home to avoid takeout, etc. I'm also the one that handles the finances, so that helps take some load off his shoulders.

However, while I am the one that does the finances I am sure to keep him in the loop with all our financial things. That's part of what I love about DR, it's really helped with our relationship in that regard. We don't fight about money, we discuss our goals and then find ways to achieve them.

This was honestly one of the best things we've done together!

 

[momtosam]

I keep attempting to follow Dave's plan. It is definitely an on-going learning curve. Wrapping my mind around a monthly budget has been so hard -- I don't know why the concept escapes me. I've found for myself that it works better to budget just one paycheck at a time. I'm keeping records of how each check is budgeted and then hope after I've done 2-3 months I can create a montly budget based on that. I tried the You Need A Budget download that many people talk about on livinglikenooneelse, but that really confused me!

 

[Baloosgirl23]

Totally agree!

We just marked our 5 yr anniversary on DR this month. At the time we had no CC debt, but had 2 financed BMWs in the driveway. We focussed on our debt and paid them off way early. During this we bought our DVC contracts (we thought long and hard on that!). Financed them for 10 years, paid them off in 2. We now are massively saving money for our fully funded emergency fund and retirement.

I too am a SAHM for the time being. I view my contribution to the family's finances as it's my job to make sure we don't over spend. I power shop with coupons, hit CVS for the deals, make meals at home to avoid takeout, etc. I'm also the one that handles the finances, so that helps take some load off his shoulders.

However, while I am the one that does the finances I am sure to keep him in the loop with all our financial things. That's part of what I love about DR, it's really helped with our relationship in that regard. We don't fight about money, we discuss our goals and then find ways to achieve them.

This was honestly one of the best things we've done together!

THAT'S AWESOME!!! That is such a dream of ours too. We have a very long road ahead of us before we can get there though. However, we do have time on our side as we are both only 30 and currently only have one baby. It just seems overwhelming right now. However, we're going to try to be debt free other than our mortgage by 2015. Does this seem like a reasonable timeframe to those of you who have done this plan? Thanks for all of the information so far.

 

[bumbershoot]

It just seems overwhelming right now. However, we're going to try to be debt free other than our mortgage by 2015. Does this seem like a reasonable timeframe to those of you who have done this plan? Thanks for all of the information so far.

Well, we don't know what sort of debt you have. So that's impossible to answer.

Join llnoe.com, start with the steps! Get current. Work out your first budget. Get your baby emergency fund. Do those first, don't jump ahead! Step by step. People on llnoe will help you tremendously if you post your budget.


We found DR and llnoe while in the throes of a looming layoff, realizing how close to the edge we were. We had *just* financed DVC. We had a horrible car loan. No savings. Then hubby got a new job, there was severance, he got another job, he got a bonus for the new job...we had gotten scared, found a good plan, and then had an influx of cash. Since August we have more than halved our car loan, and it will be gone by October, if not before. Then we'll work on DVC and figure it will take a year from then (which makes our loan only 2.5 years of the 10 it could be). We have a bit of an emergency fund. We're eating better (making food at home), enjoying the times we do go out more (we have a fund every month for "fun"), and feel really good about ourselves.

So that's our experience so far!

 

[rileyreese]

Just remember it gets easier! We just started back on our budget and the first month or two are the worse after that it is alot better so just stick with it!

 

[Carrie772]

A budget is really a plan for spending. Some money you spend now (bills, fun and living expenses), some later (cars and trips) and some much later (like when you retire)!

Once I thought like that it was so much easier. It's not like a diet. More like a "looking forward to spending" thing.

As a former member of the SAHM's club, my hubby was super great about saying that the money he made was family money and it was our responsibility to spend it wisely.

Now that I work part time in the ministry, I only make 10,000 a year, but that is still family money. We have never had separate accounts or done that "this is mine, that is yours" thing. Just not the way for us to go.

Some do it; it's not for us.

 

[minnie1928]

Just remember it gets easier! We just started back on our budget and the first month or two are the worse after that it is alot better so just stick with it!

This is sooo true! I adjust my budget amounts about once/year now, the rest of the time it just flows right along without any help from me. It's so nice knowing that pretty much whatever bill comes up, we can handle it. Either I've already accounted for it and have the money saved up for that particular thing. Or, I have an emergency fund that can handle the bigger emergencies. The emergency fund has such a calming effect on things. Even my DH says he's sleeps better at night knowing that we have one.

 

[nunzia]

I have not done the FP workshop ... or read his books (yet ... I have one ordered at the library). But I found a great website that works like this one (it was actually referred by someone on this board). It is great for all around sound financial support ..

http://www.livinglikenooneelse.com/

I've tried to sign up at that forum and I keep getting a message that I'll get an email to complete sign up and never did. Anyone else have that problem?

 

[nunzia]

Well, we don't know what sort of debt you have. So that's impossible to answer.

Join llnoe.com, start with the steps! Get current. Work out your first budget. Get your baby emergency fund. Do those first, don't jump ahead! Step by step. People on llnoe will help you tremendously if you post your budget.


We found DR and llnoe while in the throes of a looming layoff, realizing how close to the edge we were. We had *just* financed DVC. We had a horrible car loan. No savings. Then hubby got a new job, there was severance, he got another job, he got a bonus for the new job...we had gotten scared, found a good plan, and then had an influx of cash. Since August we have more than halved our car loan, and it will be gone by October, if not before. Then we'll work on DVC and figure it will take a year from then (which makes our loan only 2.5 years of the 10 it could be). We have a bit of an emergency fund. We're eating better (making food at home), enjoying the times we do go out more (we have a fund every month for "fun"), and feel really good about ourselves.

So that's our experience so far!

Way to go Molly!! (not being nosy, but did just notice the Amazon thing is off your sig )

 

[Kies99]

My wife runs the Financial Peace University at her church.

Using his plan, we were able to put a $50,000 addition on our house

We paid CASH!

 

[Gr8t Fan]

This is sooo true! I adjust my budget amounts about once/year now, the rest of the time it just flows right along without any help from me. It's so nice knowing that pretty much whatever bill comes up, we can handle it. Either I've already accounted for it and have the money saved up for that particular thing. Or, I have an emergency fund that can handle the bigger emergencies. The emergency fund has such a calming effect on things. Even my DH says he's sleeps better at night knowing that we have one.

I completely agree. Just knowing that we have an EF to handle the unexpected what ifs, makes life so much less stressful.

 

[Baloosgirl23]

I don't disagree that it will get easier, in fact I'm looking forward to those days. I was just interested in how each of you handled the first couple of months? We just started the plan and with now only having one income (which we've NEVER done before) it is a little shocking to see exactly what we have left over from check to check. I must say though, walking into the store with the exact numbers always in my mind does make me question every single purchase. Thanks for all of the perspectives though, it's nice to hear everyone's story.

 

[belle41379]

Definetly take a class if you can. You can check out his website for when/where in your area a class is starting. We teach the one at our church, and can't recomend it enough.

In addition to what the others have said about the importance of being consistant with doing (and sticking to) your budget, I think one of the most important things to do is to use the envelope system (ie, pay CASH for everything like groceries, dinner out, movies, etc.). It will really cut back on those last minute purchases when you have a plan for all the cash you have.

Good luck! You can do it!!

 

[ILuvMulan]

I am so glad to find this thread!! I just started reading Dave Ramsey's book. We only have mortgage, car, and DVC debt but need to get the current car paid off to get a new one within a couple of years and I was feeling really guilty about the DVC debt. Glad to know that others have done Dave's program and not sold their DVC contracts. I really love my DVC and do not regret it. But any add-ons will be with cash!

 

[bumbershoot]

ILuvMulan, assuming you financed with DVC, the lovely thing about them is how easy they make it to accept extra payments. So once you reach them in your snowball, it'll be easy.


nunzia, thanks! But no worries, DH is still there. I just changed the sig all up. He's product testing, which is so cool b/c he gets to play with his electronic toys for a living, though it means he's traveling far and wide.


Baloosgirl23...we had a weird start, in that we had that influx of cash so we were able to start off with a bang. But with budgeting, I think that's hard for everyone. I do NOT have a low grocery budget like many on llnoe and the Budget Board here do. It's rather high, actually. But we eat a lot of organics, fresh produce, etc, and I include everything I would buy at a grocery/costco/etc store in the grocery budget.

We started with a hefty amount, and after two months realized that I was doing FINE and still had a ton of untouched food in the pantry! So I dropped the grocery budget by $200. And here we are two days before the end of the month, and I still have some cash in that envelope. And I still have a ton of food in the pantry. Ruh roh, looks like I'll be dropping the budget again this or next month. (then again, groceries are easier when DH is traveling, since his food is paid for with his per diem!)

Going into a store with cash, and knowing that that's IT, makes you a better, more focused shopper. You make sure to eat before shopping, and have options for the kidlet without having to give in.

I think I mentioned that we have a budget for "fun". We realized how often we were going out to eat, and the only feeling we had from that was "fat and guilty". Now we spend a fraction of what we were spending, and not only do we appreciate it more, but we actually remember what restaurant or two we went to in a month. And that's where the few bucks for a slice of pizza at Costco comes from, as a bit of fun while shopping.


Someone described budgeting as "telling your money where to go, instead of wondering where it went". And while a "zero budget", where you are naming EVERYTHING so there is no unnamed, random, money in the budget is scary, and while I still haven't made it quite there yet (I still have a little cushion that's "snowball for the beginning of Feb unless something else comes up in the next 2 days" right now), it is pretty cool to know that you have accounted for everything you can possibly account for. And that there's no *need* for the extra, once you're sure everything you need to pay is being paid etc etc. And for emergencies you'll have the BEF.

 

[bookgirl]

I did a modified DR and everyone on LLNOE.com will tell you not to do that but it did work for me.

I paid off all my CC dept from grad school, my car, and I'm within about 2800.00 of having my Student Loans paid off.

The best thing for me was the envelope system and snowballing my debts. I was not what DR calls gazelle (using all money towards bills exclusivly) and he advocates cutting up all credit cards and just using debit. However I still held out money from my snowball (one savings for emergency fund which he recomneds, one for having fun that was not tied to my weekly blow money which he does not recommend).

I kept my cc and still use my one rewards card (it never carries a balance but I use it for travel and work). He calls this playing with snakes. I held more in savings than he recomends while paying off debt because of my insecurities about on hand cash.

But I belong to LLNOE and I still go there for tips and encouragment. I just don't talk about where I deviate from the plan. Though I was a lot closer to the plan at the beginning.

I think it's a good starting point and you have to use what works best for you. However you do have to have some self restraint and patience for this plan. I was very strict at first but now that I'm not as tightly budgeted (paid off most of my stuff and went from pt to ft work) I just use my own version of it and it works for me. However I do not finance anything on cards anymore and I plan out purchases and save up for them. That was the best habit I got from DR.

Good luck.

 

[bennyrn12]

I am on week 3 of being a Dave Ramsey gazelle and I love it!! I cant believe how much I have "left over" now instead of wondering where it all went. Im not going to lie, its very very hard. My friends and family doesnt understand why we cant go to eat (its not in the budget) and thought we were crazy for cutting up the credit cards. I agree with other posts, your budget is a work in progress. I thought with coupons and my stockpile we could have a $200/mo grocery budget no problem. After 3 weeks Im learning 75 may be more realistic. Also I added a misc envelope for all of the things that could come up that arent really budget worthy (shipping gifts due to illness, etc). We started the plan with 52,000 in car, credit card, loan and DVC debt. Without any extra money being put into the snowball (which there will be tons of extra due to ot and second jobs) we will be debt free except the house in dec 2012!