*The Dave Ramsey 'Baby Steps' Thread*

[barkley]

I'm not sure how to approach DW about getting on board with finances. Every time I try and talk to her (tried last night as a matter of fact), she said it's my job to handle all bills, make sure they're paid on time, know where and how to pay them, take care of all of the financial stuff. I've told her I need help. So not sure what else to do. I told her last night I wanted to give her all the info on paying the bills, when they're due and when/how to pay them just in case something happened to me. She said she wasn't interested, and that she'd figure out how to do it if something to were to happen.

you've spoken in the past of how you and your wife regularly attend church. churches sometimes offer free DR financial peace classes. one of the aspects spoken to is for husband and wife to equally share the responsibility/burden of money management. perhaps in a church setting she would be more open to these concepts.

 

[WDW_fan_in_TX]

Thank you for this. I talked to our pastor just a couple of months ago about doing a DR class, and he said they just did one a few years ago and it costs too much to do another. I just think it's a matter of math and numbers. She's not very good with those 2 items, she thinks, so she prefers not to do anything in regards to those numbers (which is weird because she works at a bank, lol).

you've spoken in the past of how you and your wife regularly attend church. churches sometimes offer free DR financial peace classes. one of the aspects spoken to is for husband and wife to equally share the responsibility/burden of money management. perhaps in a church setting she would be more open to these concepts.

 

[barkley]

Thank you for this. I talked to our pastor just a couple of months ago about doing a DR class, and he said they just did one a few years ago and it costs too much to do another. I just think it's a matter of math and numbers. She's not very good with those 2 items, she thinks, so she prefers not to do anything in regards to those numbers (which is weird because she works at a bank, lol).

you might check with other churches in your area-they frequently welcome non members to these classes. your wife works in a bank? it would seem she would be extremely interested in knowing where your household stands financialy-most if not all bank/financial institution employees are contractually held to a higher financial conduct standard as a condition of employment. many of these employers have a tolerance level and internally monitor individual and shared credit/banking stats. I hate to think of worse case scenarios but she should be aware of your household's financial situation if only b/c if something happened to you she would be operating on far less income and in what sounds to be a financial circumstance that could endanger her own source of income.

 

[ThereYouSeeHer]

Thanks for promoting this thread. I just started watching DR earlier this year, and I agree with most of what he says.

But here's a breakdown of my debt (highest to lowest with what I currently owe):
- School loan: $19,574 with a $148 monthly payment at 4.25% APR;
- Car payment: $15,693 with a $505 monthly payment at 23.8% APR;
- Bank loan: $3,432 with a $235 monthly payment at 11.5% APR;
(from when my wife was involved in a hit and run when the other driver was at fault but took off)
- CC1: $439 with a $40 monthly payment at 28.2% APR and a $100/year fee;
- CC2: $297 with a $30 monthly payment at 29.7% APR and no annual fee;

Welcome! I'll give you the Ramsey plan for the first four steps below, but here's some ground rules when following the Baby Steps:

1) Keep making a budget. Plan every dollar, every month to see where you can make sacrifices.
2) No more use of debt. Stop adding to credit cards and don't take out new loans.
3) Pause retirement investing. This is temporary until you are past Baby Step 3. If getting out of debt will take more than a couple of years, then you need more income.

Step 1: Save $1000 in the bank as a starter emergency fund. This money is only for emergencies that answer the questions, "Is it unexpected, is it necessary, and is it urgent?" Pay minimums on all debts until this amount is saved.

Step 2: Use the snowball method to pay off all non-mortgage debts. List all debts in order of smallest balance to largest. Pay minimums on all debts. For the smallest debt, you will also add any extra money to this debt until it is paid off. Then, repeat the process on the remaining debts.

Step 3: Save 3-6 months of expenses in a fully funded emergency fund.

Step 4: Contribute 15% of gross household income into retirement accounts.

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There are a bunch of debt calculators online, but here is the Ramsey one: https://www.ramseysolutions.com/debt/debt-calculator.

Quickly putting your debts into the calculator gives the following information:

1) Only paying the minimum amount will take about 15 years to pay off all your debt. You would be 65 years old.
2) Adding $100 a month to your minimum payment will take about 4 years to pay off all your debt. You would be 54 years old.

The choice is yours. It would be far preferable to work multiple jobs at 50 years old, than 80 years old.

I highly suggest getting an extra job at a place you already shop and could get an employee discount (i.e., supermarket, Walmart, etc.). This would give you income, plus the discount would help your money go farther.