*The Dave Ramsey 'Baby Steps' Thread*

[ThereYouSeeHer]

if you have at&t as your carrier check into the aarp discount. we get something like $10 per line for it and another $10 per line for doing direct pay from our checking account-it adds up.

Ooh, nice! We don't currently have AT&T, but that's good to know if we're ever looking to switch. Thanks!!

 

[sorahl1]

Just found this group My wife and I sort of did the Ramsey system. we love him. We are debt free, one kid thru college, one in college, don't owe money to anyone. Its just the daily/monthly life that kills us Retirement is set up great, we just need to survive to get there Oh the other pain point for us is my van is getting old but praying it holds on long enough to save what we need for the next car..
one area we never subscribed was the credit card thing. always felt guilty about that but.. we never carry a balance. We don't spend more than we need to (because of my wife's constant restraint of me )

 

[AJollyHoliday]

Just found this group as well! My DH and I started our debt free journey in 2017 and paid off our debt (aside from our mortgage) in 2018. We have completed steps 4 and 5. We were working on step 6, paying off our mortgage, but we had to stop paying extra on it at the moment. Our DD goes to a private school and we do not qualify for financial aid so we have been cash flowing that. Go figure, not having debt has played into our ability to afford the school. While yes, we can "afford" it, it is still quite tight. Thank you EveryDollar for helping us to track our spending. After doing it for so long, I feel like it is muscle memory and I have a sense for where I am in my spending and saving. Our financial planner constantly stresses to us how good we are with money and savings. You really only know your own finances and so it is interesting to hear his perspective. Once he asked me if having multiple savings accounts and budgets stresses me out and I said it is the complete opposite! It brings me peace.

I will never go back to being in debt!!

 

[ThereYouSeeHer]

Just found this group My wife and I sort of did the Ramsey system. we love him. We are debt free, one kid thru college, one in college, don't owe money to anyone. Its just the daily/monthly life that kills us Retirement is set up great, we just need to survive to get there Oh the other pain point for us is my van is getting old but praying it holds on long enough to save what we need for the next car..
one area we never subscribed was the credit card thing. always felt guilty about that but.. we never carry a balance. We don't spend more than we need to (because of my wife's constant restraint of me )

Just found this group as well! My DH and I started our debt free journey in 2017 and paid off our debt (aside from our mortgage) in 2018. We have completed steps 4 and 5. We were working on step 6, paying off our mortgage, but we had to stop paying extra on it at the moment. Our DD goes to a private school and we do not qualify for financial aid so we have been cash flowing that. Go figure, not having debt has played into our ability to afford the school. While yes, we can "afford" it, it is still quite tight. Thank you EveryDollar for helping us to track our spending. After doing it for so long, I feel like it is muscle memory and I have a sense for where I am in my spending and saving. Our financial planner constantly stresses to us how good we are with money and savings. You really only know your own finances and so it is interesting to hear his perspective. Once he asked me if having multiple savings accounts and budgets stresses me out and I said it is the complete opposite! It brings me peace.

I will never go back to being in debt!!

Welcome to both of you! I love how people pop into this thread to share how the Baby Steps' financial principles helped them break through debt and plan for the future!

We're in a similar boat. Debt free, but college and the monthly grind still makes everything tight. However, I am thankful we learned all this many years ago. We are so disciplined today because of it!

 

[ThereYouSeeHer]

Wrapping up March!

--No changes in the Baby Steps.

--Dug deep this month and turned in our coins at Coinstar, haha! We love getting a no-fee gift card to Amazon, and then using it for household purchases.

--Still saving for upcoming bills and expenses.

April budget is set!

 

[ThereYouSeeHer]

April wrap-up...

--No changes in the Baby Steps.

--We were hoping our push mower would last until we were ready to buy a riding lawn mower, but unfortunately, it had other plans. So, our savings took a sizable hit to get a new one. For now, we will have to continue to push mow our almost 1.5 acres. Blue skies and sunshine guaranteed, I guess!

--We really buckled down with groceries this month, and it helped. Instead of going to the store on an as-needed basis (which usually leads to just getting takeout), we committed to intentionally going at the start of each week. We also rotated grocery stores each time, just to mix it up. It's been interesting to re-explore products and prices at different stores, which actually helped reinforce why we like shopping at some stores over others.

--Other than that, always trying to get ahead of future bills and expenses!

May budget is set!

 

[Sadeesmom]

For now, we will have to continue to push mow our almost 1.5 acres.

At least this doubles as a workout, right? So you're staying healthy while saving money!

 

[ThereYouSeeHer]

At least this doubles as a workout, right? So you're staying healthy while saving money!

That's honestly what I have to tell myself with every step, haha! Over and over, "I am getting exercise. I am enjoying nature. I can do this. A riding lawn mower is a want, not a need..." It's a lesson in contentment for sure!

 

[ruadisneyfan2]

April wrap-up...

--No changes in the Baby Steps.

--We were hoping our push mower would last until we were ready to buy a riding lawn mower, but unfortunately, it had other plans. So, our savings took a sizable hit to get a new one. For now, we will have to continue to push mow our almost 1.5 acres. Blue skies and sunshine guaranteed, I guess!

--We really buckled down with groceries this month, and it helped. Instead of going to the store on an as-needed basis (which usually leads to just getting takeout), we committed to intentionally going at the start of each week. We also rotated grocery stores each time, just to mix it up. It's been interesting to re-explore products and prices at different stores, which actually helped reinforce why we like shopping at some stores over others.

--Other than that, always trying to get ahead of future bills and expenses!

May budget is set!

That is rough. Growing up we had 3/4 acre and always had a riding mower and a push mower to get in close to the house and around the porches and trees. Sometimes though, when it was in need of repairs, we had to use the push mower for the whole thing. Ugh in that stifiling heat.

Dh & I have a smaller property but I think if I had to do 1.5 acres now, even with my full belief in the "if you don't have the money for it you can't afford it" mentality, I would have been looking for a 0% interest or maybe divert our snowball away from other goals for while to be able to buy one.

The good thing is that your push mower will still get some use even after you get a riding mower some day.

 

[barkley]

The good thing is that your push mower will still get some use even after you get a riding mower some day.

ABSOLUTELY!

we own 10 acres and our push mower is still the BEST for some areas vs. our rider. our push can be used on areas our rider cannot and therefore provides removal of brush that protects our home.

 

[ThereYouSeeHer]

That is rough. Growing up we had 3/4 acre and always had a riding mower and a push mower to get in close to the house and around the porches and trees. Sometimes though, when it was in need of repairs, we had to use the push mower for the whole thing. Ugh in that stifiling heat.

Dh & I have a smaller property but I think if I had to do 1.5 acres now, even with my full belief in the "if you don't have the money for it you can't afford it" mentality, I would have been looking for a 0% interest or maybe divert our snowball away from other goals for while to be able to buy one.

The good thing is that your push mower will still get some use even after you get a riding mower some day.

ABSOLUTELY!

we own 10 acres and our push mower is still the BEST for some areas vs. our rider. our push can be used on areas our rider cannot and therefore provides removal of brush that protects our home.

Yeah, we assumed we would still need a working lawn mower, even if we buy a riding one. So, at least it doesn't make the purchase feel like a complete waste!

Although we wouldn't finance, we will dig from somewhere else, if we need to. Technically, we have our emergency fund. However, since this isn't an emergency (and because it just took us almost 2 years to replenish it), I really don't want to pull from here. Then, we have our college fund. However, next semester's bill will be due soon, and I don't know if there is enough time to save up again if we drained it. Finally, we have about a 1-month cushion that we keep in our checking account (as a personal version of overdraft protection or for unexpected bills). This would be the most likely source, but we would need to be very careful and put it back as quickly as possible.

We were trying to wait until at least Memorial Day to see if there would be any sales or incentives. At this point, the weather is going to be the biggest reason as to when we take the plunge or not. Excessive heat or even rain would make us purchase sooner than later.

 

[barkley]

At this point, the weather is going to be the biggest reason as to when we take the plunge or not. Excessive heat or even rain would make us purchase sooner than later.

the weather here has been nuts! we've had lovely weeks with temps in the 70's so everything started blooming and growing-then we plummet back down to freezing, then it's warmer but endlessly raining. mow one day and a few days later it's fluffy again! yesterday we had beautiful sunshine with intermitant rain, graupel, hail and light snowflakes-welcome to the month of may

 

[ruadisneyfan2]

the weather here has been nuts! we've had lovely weeks with temps in the 70's so everything started blooming and growing-then we plummet back down to freezing, then it's warmer but endlessly raining. mow one day and a few days later it's fluffy again! yesterday we had beautiful sunshine with intermitant rain, graupel, hail and light snowflakes-welcome to the month of may

What the heck is graupel?

 

[ruadisneyfan2]

Yeah, we assumed we would still need a working lawn mower, even if we buy a riding one. So, at least it doesn't make the purchase feel like a complete waste!

Although we wouldn't finance, we will dig from somewhere else, if we need to. Technically, we have our emergency fund. However, since this isn't an emergency (and because it just took us almost 2 years to replenish it), I really don't want to pull from here. Then, we have our college fund. However, next semester's bill will be due soon, and I don't know if there is enough time to save up again if we drained it. Finally, we have about a 1-month cushion that we keep in our checking account (as a personal version of overdraft protection or for unexpected bills). This would be the most likely source, but we would need to be very careful and put it back as quickly as possible.

We were trying to wait until at least Memorial Day to see if there would be any sales or incentives. At this point, the weather is going to be the biggest reason as to when we take the plunge or not. Excessive heat or even rain would make us purchase sooner than later.

Maybe they will have a price drop for fall clearance or you can see if people are selling any second hand.

 

[barkley]

What the heck is graupel?

graupel forms when droplets of supercooled water glom onto snowflakes and result in an icy coating it's like a snow/hail hybrid.

 

[ThereYouSeeHer]

Wrapping up May...

--Financial aid packages finally went out. Tuition is going up, and we're losing a scholarship (which we knew because it was first-year only), so we have a net increase of a few thousand dollars.

--It was an extra paycheck month, which helped us save a little for future expenses.

Still plugging along...always saving for something on the horizon!

 

[ThereYouSeeHer]

Wrapping up June...

--No changes in the Baby Steps. However, we decided to start projecting our retirement balances better. With a certain number in mind for a certain date, we calculated what our minimum year-over-year returns need to be in order to reach that goal. This will either give us peace of mind that our plan is working or encourage us to make changes if numbers start falling behind. We used the following calculator to obtain our annual return rate, as well as see what our year-end balances should be: Investment Calculator.

--Next college semester is paid in full. We have had an aggressive savings pace for college and other things, but we will have to pause our savings goals until possibly September. Just too many expenses in the present right now!

July budget is set!

 

[DisneyTexan]

This isn't really part of the program, but its worth mentioning: this weekend is a good opportunity to check your federal tax withholding. We are exactly halfway done with the year, and its easy to see where you are on withholding, and make sure you are halfway to the amount of tax you want to pay by the end of the year. If you need to make an adjustment, submit a revised W-4 before your next paycheck.

 

[Bellex917]

I've been listening to Dave and crew for about 2+ years now. While I didn't follow his plan perfectly (I built a 3 month E fund and didn't deplete it, and we did keep investing), we are debt free and it was largely his show and his anti-debt philosophy that pushed me.

I'd be curious to know what baby step you all think I'm in. It doesn't MATTER, but I can't decide if I'm in step 3 or 4-5-6. Here's the situation.

Debt free (as of April!)

Full 3 month eFund for all expenses, HOWEVER, if you take into account my income is stable (tenured teacher and I have disability insurance I pay for privately, I can't be let go, so my income is not going anywhere and I'm worth more dead than alive anyway LOL) we have closer to 6-9 months of expenses assuming we still have my income. My H is in tech, so there's zero security there.

We are workin to double our eFund so we'd have a full six months not taking into account my income would still be there so we'd have a separate "house eFund" and think of the original one as a "job loss efund". Obviously both could be used as needed, but just the mentality.

Are we still in BS3, bc we are working to build up our savings, or 4-5-6 bc we do have an efund and are choosing to double it almost like a house sinking fun?

This obviously is irrelevant to all areas of life, I'd just be curious other's opinion on this bc when I listen I'm always thinking, "What step am I actually in?!?!"

 

[ThereYouSeeHer]

I've been listening to Dave and crew for about 2+ years now. While I didn't follow his plan perfectly (I built a 3 month E fund and didn't deplete it, and we did keep investing), we are debt free and it was largely his show and his anti-debt philosophy that pushed me.

I'd be curious to know what baby step you all think I'm in. It doesn't MATTER, but I can't decide if I'm in step 3 or 4-5-6. Here's the situation.

Debt free (as of April!)

Full 3 month eFund for all expenses, HOWEVER, if you take into account my income is stable (tenured teacher and I have disability insurance I pay for privately, I can't be let go, so my income is not going anywhere and I'm worth more dead than alive anyway LOL) we have closer to 6-9 months of expenses assuming we still have my income. My H is in tech, so there's zero security there.

We are workin to double our eFund so we'd have a full six months not taking into account my income would still be there so we'd have a separate "house eFund" and think of the original one as a "job loss efund". Obviously both could be used as needed, but just the mentality.

Are we still in BS3, bc we are working to build up our savings, or 4-5-6 bc we do have an efund and are choosing to double it almost like a house sinking fun?

This obviously is irrelevant to all areas of life, I'd just be curious other's opinion on this bc when I listen I'm always thinking, "What step am I actually in?!?!"

Great questions! First, congrats on being debt free!! If I understand everything correctly, I would place you in steps 4-5-6. Here's why:

BS1: Complete. Assuming you have at least $1000 in the bank.
BS2: Complete. Assuming you have paid off all debt except for any mortgage.
BS3: Complete. Technically, the Baby Step is to have 3-6 months of household expenses saved (i.e., can you last 3 months if neither spouse was working?). Dave's recommendation is 3 months if you are a double income household with stable jobs and health. Otherwise, everyone else should generally be saving up to 6 months of expenses. So, technically, 3 months will meet the requirement, even if it is less than Dave's 6 month recommendation.
BS4: Unknown. Are you currently saving 15% gross income into (preferably) tax-advantaged retirement accounts? Technically, individuals would not invest more than 15% towards retirement at this time.
BS5: Unknown. Do you have children and are you currently saving anything towards college funds? There is no set minimum here, so anything counts.
BS6: Unknown. Do you have a mortgage and are you currently paying it down with extra principal payments? There is no set minimum here, so anything counts.

If you are not contributing to retirement, then you could be considered Baby Step 3 while you work to increase your emergency fund. However, if you have already saved a minimum 3-month emergency fund and moved on to Baby Step 4, then I would consider you to be there or higher. In that case, anything extra you save would be considered padding your existing emergency fund or going towards some other sinking fund.

Hopefully, that makes sense, but if you have any more questions, please let me know!