*The Dave Ramsey 'Baby Steps' Thread*

[ThereYouSeeHer]

Just checking in. Hope everyone's 2023 is off to a good start!

We finished Baby Step 3 and (re)started Baby Step 4 this month. College begins this year, and we haven't even started Baby Step 5 yet. Deep breaths...

Step 1: Done!
Step 2: Done!
Step 3: Done!
Step 4: In progress
Step 5: Anticipated 2023?
Step 6: Done!
Step 7: Anticipated 2030??

 

[ThereYouSeeHer]

With recent news of multiple data breaches (again!), here's some information about checking your credit reports.

By law, you are entitled to one free credit report from each of the 3 major credit bureaus (per year) from this official website: https://www.annualcreditreport.com.

As an example, here is how you can potentially stagger them every four months throughout the year:

January 2023: Experian
May 2023: Equifax
September 2023: Transunion
January 2024: Time to start the cycle again with Experian!

Due to the pandemic, you are currently allowed to check your credit report with each of these bureaus once a week for free. This program is set to expire in December 2023.

Also, consider ways to limit your exposure and risk:

1. Close unused accounts. If they aren't being used, you may be unaware of fraudulent activity on them.
2. Don't open unnecessary accounts. Chasing bonuses increases risk by spreading your personal data around.
3. Opt-out of having your information shared. Visit: https://www.optoutprescreen.com.
4. Place a credit freeze on your file with each of the 3 major agencies. See: Security Freeze Basics.

 

[pigletto]

Just checking in. Hope everyone's 2023 is off to a good start!

We finished Baby Step 3 and (re)started Baby Step 4 this month. College begins this year, and we haven't even started Baby Step 5 yet. Deep breaths...

Step 1: Done!
Step 2: Done!
Step 3: Done!
Step 4: In progress
Step 5: Anticipated 2023?
Step 6: Done!
Step 7: Anticipated 2030??

This was us. We didn’t have much in the way of university savings when it started. We are on the save as we go plan and we contribute where and when we can. DS is in a co op degree program where he will work in his field of study as we go along, plus he works summers. Lastly he applies for the federal student loan program and only takes the grant portions ( not much but it helps).

Is it ideal ? Nope. I wish we had been in a position to save it all up years ago. Is it working ? It sure is, and he will graduate debt free with work experience in his field. Our combined efforts will get him there and we all feel great about it.

So I guess I’m saying .. don’t panic, just know it can be done and done without a mountain of debt for either of you !

 

[ThereYouSeeHer]

This was us. We didn’t have much in the way of university savings when it started. We are on the save as we go plan and we contribute where and when we can. DS is in a co op degree program where he will work in his field of study as we go along, plus he works summers. Lastly he applies for the federal student loan program and only takes the grant portions ( not much but it helps).

Is it ideal ? Nope. I wish we had been in a position to save it all up years ago. Is it working ? It sure is, and he will graduate debt free with work experience in his field. Our combined efforts will get him there and we all feel great about it.

So I guess I’m saying .. don’t panic, just know it can be done and done without a mountain of debt for either of you !

Thanks! Yeah, our children understand that we are unable and unwilling to go back into debt for college. Technically, they can choose to take out debt or not, but we have multiple plans to avoid that (changing schools, changing from on-campus to online, changing from full-time student to part-time, taking a break, etc.).

We will cash flow as much as we can, for as long as we can. We may have some tough choices to make, but we can only take it one semester at a time. Down the road, both children will overlap for one year (so double the costs), but we'll cross that bridge when we come to it!

 

[ThereYouSeeHer]

New month, new budget! Here are some budget amounts that are either recommended by the Ramsey folks or are actual averages of what Americans spend each month. See where you stack up and what your budget busters might be!

Link to Article: How to Determine Budget Percentages

 

[barkley]

New month, new budget! Here are some budget amounts that are either recommended by the Ramsey folks or are actual averages of what Americans spend each month. See where you stack up and what your budget busters might be!

Link to Article: How to Determine Budget Percentages

the numbers on a few of these categories seem way off-utilities in particular, i don't know anyone who manages to get by heating/cooling their home for an average of $166 per month. i receive my electricity from a not for profit cooperative that charges much less than the national average but i haven't been below $200 per month in years and years. perhaps the numbers are off b/c at least one of the sources is 2 years old.

 

[DLgal]

the numbers on a few of these categories seem way off-utilities in particular, i don't know anyone who manages to get by heating/cooling their home for an average of $166 per month. i receive my electricity from a not for profit cooperative that charges much less than the national average but i haven't been below $200 per month in years and years. perhaps the numbers are off b/c at least one of the sources is 2 years old.

I agree that a lot of these numbers are way off. We can heat/cool our home for under $200 about 5 months out of the year, but the warmer months, we average $250-300/month.

The grocery numbers above are laughable.

 

[ThereYouSeeHer]

the numbers on a few of these categories seem way off-utilities in particular, i don't know anyone who manages to get by heating/cooling their home for an average of $166 per month. i receive my electricity from a not for profit cooperative that charges much less than the national average but i haven't been below $200 per month in years and years. perhaps the numbers are off b/c at least one of the sources is 2 years old.

I agree that a lot of these numbers are way off. We can heat/cool our home for under $200 about 5 months out of the year, but the warmer months, we average $250-300/month.

The grocery numbers above are laughable.

Yes, it definitely varies!

However, our personal numbers are similar to the Utilities and Food categories.

Our energy bill is generally $120 or less a month (about 1100-1200 square feet, all electric).

For groceries, we budget $40 per day ($280 per week for a family of four). We don't always stick to that, but it isn't terribly off from their numbers (about $35 per day or $245 per week for "Thrifty" spending).

You can use their data source to add up your own averages for comparison. For example, for 2 adults and 2 teens:

Low: about $245 per week, $35 per day
Moderate: about $295 per week, $42 per day
Liberal: about $370 per week, $52 per day

 

[DLgal]

Yes, it definitely varies!

However, our personal numbers are similar to the Utilities and Food categories.

Our energy bill is generally $120 or less a month (about 1100-1200 square feet, all electric).

For groceries, we budget $40 per day ($280 per week for a family of four). We don't always stick to that, but it isn't terribly off from their numbers (about $35 per day or $245 per week for "Thrifty" spending).

You can use their data source to add up your own averages for comparison. For example, for 2 adults and 2 teens:

Low: about $245 per week, $35 per day
Moderate: about $295 per week, $42 per day
Liberal: about $370 per week, $52 per day

Geez. I already spent $380 on food this week between Saturday and Tuesday. I have another grocery shop coming up Friday. Will be at least another $100.

We haven't spent less than $2000/month on groceries since my kids were in elementary school.

 

[ThereYouSeeHer]

Geez. I already spent $380 on food this week between Saturday and Tuesday. I have another grocery shop coming up Friday. Will be at least another $100.

We haven't spent less than $2000/month on groceries since my kids were in elementary school.

National averages can be helpful and entertaining, but it really comes down to each family's income, expenses, size, and regional cost of living.

Spending amounts are also influenced by disposable or discretionary income (I'm always amazed at the level of income that everyone on these boards seems to have!).

For us, our spending levels are simply out of necessity. We either stick to our budget, or we go in debt each month. This thread was created to help me keep choosing the first option, haha!

 

[Sadeesmom]

New month, new budget! Here are some budget amounts that are either recommended by the Ramsey folks or are actual averages of what Americans spend each month. See where you stack up and what your budget busters might be!

Link to Article: How to Determine Budget Percentages

We are usually a two person household, adding a third person for about 1/3 of the month. I'm a complete nerd & track every penny every month, and here's my comparison using my last 3 months average:

Giving: 12% (10% on chart)
Saving: 15% (15% on chart)
Food (Groceries & Dining out): $658.33 ($685 on chart)
Utilities (Power, water, sewer, internet, cell phone, & trash): $523.97 ($224 on chart, but I added a few categories)
Housing: 19% (25% on chart)
Transportation (includes insurance): $557.15 ($298 on chart, but I added insurance)
Health: $125 FSA contribution-$0 spent ($130 on chart)
Insurance (health & Dental): $448 (varies on chart)
Childcare: $0 ($892-2483 on chart)
Lifestyle/entertainment/personal/misc: $277.59 ($507+5% on chart)

I actually think we spend too much money eating out, but we are BS4+, so I don't worry about it too much. Also not included above are 529 contributions which are actually my focus right now. That is what gets my "as much as you can" extra.

I think we are a fairly average (though "weird") household, leaning towards the frugal side.

 

[FQLover]

What does BS4+ mean?

 

[Sadeesmom]

What does BS4+ mean?

It means I finished the first three baby steps, set up my 15% for baby step 4, and then started following my own plan with most Dave Ramsey philosophies. I'm hitting BS5 really hard, and plan to be a nomadic renter for the next couple of decades, so no BS6.

 

[FQLover]

Got it--thanks! BS = Baby Step eluded me.

 

[barkley]

You can use their data source to add up your own averages for comparison. For example, for 2 adults and 2 teens:

Low: about $245 per week, $35 per day
Moderate: about $295 per week, $42 per day
Liberal: about $370 per week, $52 per day

i had to use that data source every day for years when i administered food stamps to clients. had to show them the charts and commiserate with them over how their benefit was driven by these numbers and how some number cruncher in another government bureau had no clue what groceries cost in the region we were in-that it was just an average. if you can manage to stay within the thrifty food plan numbers it's a tremendous accomplishment on your part.

Geez. I already spent $380 on food this week between Saturday and Tuesday. I have another grocery shop coming up Friday. Will be at least another $100.

We haven't spent less than $2000/month on groceries since my kids were in elementary school

dh and i went grocery shopping today. i KNOW the price increases are more shocking to me b/c i only shop once a month so i'm seeing the month to month jumps vs. the edging up week to week BUT DANG! i was telling dh i can't imagine how the average family manages to provide even the most basic meals for their households. i can't believe that they've decreased what were formerly known as 'half gallons' of milk and are charging close to $5 when we were raising our kids they were not large consumers of milk but we still went through a fair amount weekly for cereal, coffee and general cooking. produce has always seemed higher here as compared to when we lived in california but good grief, with the exception of bananas i don't see how fruit is affordable to many. i went to costco-first day of new ad and ended up grabbing the last few 3 pound bags of chicken tenders that were on sale (dozens of empty boxes that held the bags in the cooler), no wonder-they were selling for just under $10 for the good tyson brand while walmart and the other store i went to was charging more for the low end 1 1/2 pound bags used to be i would get fresh chicken and make them in batches to freeze but with this sale it was less costly (never thought i would see that).

 

[ThereYouSeeHer]

how some number cruncher in another government bureau had no clue what groceries cost in the region we were in-that it was just an average.

Haha. Former government number cruncher here.

Regional costs are collected, they just have to be aggregated. I know that can be frustrating, but then something would have to change at the policy level.

if you can manage to stay within the thrifty food plan numbers it's a tremendous accomplishment on your part.

As a stay-at-home mom, I either make the money work or I go back to work. Motivation in itself!

 

[ThereYouSeeHer]

I'm hitting BS5 really hard, and plan to be a nomadic renter for the next couple of decades, so no BS6.

I'm sure you've thought of this, and you may already be doing it, but consider saving a little bit now for a potential home later. Even if it's years down the road, at least you could have a down payment and closing costs available for the right time.

Dave definitely recommends renting until someone is ready and willing to take on home ownership. However, as a real estate guy, he wants to see people in their own home as they head toward retirement. Obviously, everyone's situation is going to be different, but you could always use the money for something else if it doesn't go towards a home.

 

[barkley]

Haha. Former government number cruncher here.

Regional costs are collected, they just have to be aggregated. I know that can be frustrating, but then something would have to change at the policy level.

these days more than ever i'm glad to be in the 'former' category!

As a stay-at-home mom, I either make the money work or I go back to work. Motivation in itself!

absolutely but it seems so much more challenging vs. years past. so many of the foods i used to buy to stretch the food budget when my kids were growing up are no longer the savings-that's if you can even find them on the shelves. rice, dry beans, turkey (esp. right after thanksgiving when they were on bombing sales so i would get several for the freezer)...doing breakfast nights b/c eggs and pancakes were crazy cheap, taking advantage of great sales on ground beef and making dozens of meatballs/multiple meatloafs-the cost is crazy these days.

i'm wondering what kind of prices we will see on veggie seeds and plants this spring-i think allot of people are going to try out gardening for the first time so demand will be higher but b/c of the crazy cold weather much of the country has/is experiencing the prices may be pretty insane.

 

[DisneyMandC]

the numbers on a few of these categories seem way off-utilities in particular, i don't know anyone who manages to get by heating/cooling their home for an average of $166 per month. i receive my electricity from a not for profit cooperative that charges much less than the national average but i haven't been below $200 per month in years and years. perhaps the numbers are off b/c at least one of the sources is 2 years old.

I agree that a lot of these numbers are way off. We can heat/cool our home for under $200 about 5 months out of the year, but the warmer months, we average $250-300/month.

The grocery numbers above are laughable.

I'm always interested in other people's utility numbers. I live in the country so we don't have water, sewer, or gas out here. My house is all electric with a heat pump/central air. While I have a small house (1200 sq ft), it's poorly insulated. With two adults keeping the heat at 68 and the AC at 72, our monthly budget billing for our utilities is $114 a month. Some months it's much lower; it peaks around $200 a month in January and February. We live in Virginia so our electricity is controlled by the monopoly that is Dominion Power with no other electric options.

 

[ThereYouSeeHer]

these days more than ever i'm glad to be in the 'former' category!

absolutely but it seems so much more challenging vs. years past. so many of the foods i used to buy to stretch the food budget when my kids were growing up are no longer the savings-that's if you can even find them on the shelves.

It is more challenging now.

Meal planning, cost cutting, it's tough. If anyone would be interested, I could make a thread for recipe sharing or something like that.