Total Money Makeover-How Long Did it really take you?

[global_mom]

I have been reading Dave Ramsey's TMM book. It is very interesting and very popular but does it really work? There are plenty of testimonials in the book but how realistic is his plan? I feel like he keeps saying the same thing over and over and the advice is very basic so does it really work?

He sites many examples of people making around $40,000 a year who pay off $30,000+ of debt in 18-24 months. Is this possible? I am not being a doubter or pessimist (sp?), just want to know if "real people" have been able to stick to his plan.

How long did it /will it take you to pay off your debt following the TMM plan?

Thanks for the insight and yes, we are thinking of following the plan but just want some inspiration for success!

 

[tonilea]

I have been reading Dave Ramsey's TMM book. It is very interesting and very popular but does it really work? There are plenty of testimonials in the book but how realistic is his plan? I feel like he keeps saying the same thing over and over and the advice is very basic so does it really work?

He sites many examples of people making around $40,000 a year who pay off $30,000+ of debt in 18-24 months. Is this possible? I am not being a doubter or pessimist (sp?), just want to know if "real people" have been able to stick to his plan.

How long did it /will it take you to pay off your debt following the TMM plan?

Thanks for the insight and yes, we are thinking of following the plan but just want some inspiration for success!

It will take us 15 months to pay off 13k. We would have had it paid off in 13, but we had a $1100 emergency. At least we were able to cash flow it and not touch our baby emergency fund. Our income is about 30k.

 

[problemchild718]

Took us 9 mo to pay off 12,000. We are down to the car and house.

 

[Chicago526]

We don't follow his plan but I've read his book and we are paying down our debt. We aren't "gazelle intense" as he says, so it's taking us longer. We are doing work on our house and still have small luxuries while paying down debt. Start to finish it will take us about 5 years to pay off our consumer debt (truck loan and CCs). Could have done it in about half the time if we wanted to, but I can't talk DH into it, so we're taking the slow road.

The nice thing about his plan is that you can follow it to the letter, or just use his plan as a general guide and customize it to your own situation. The important thing is that you stop digging (stop increasing your debt) and start climbing out (paying it down). The key is that whatever plan you make, you stick to it. Just like a diet, it only works for as long as you follow it.

 

[Heluvsme]

We're on year 2 of a 3 year plan, and so far it's right on schedule.

(Fingers crossed, hoping nothing disastrous happens!!)

 

[minnie1928]

Our plan was to pay off 2 cars & DVC. We started in Feb '05 and we were on track to finish in 02/08. However, I stopped snowballing in Dec '07 so we could save up for our relocation in June to another state. I plan on starting back on snowballing probably in July/August after we move.

We did pay off 2 new cars and more than half our DVC. I think we owe about $10,000 on our DVC which we should be able to knock out before year end.

 

[KristinU]

Yes, it's possible We paid off $34k in 6 months on a $130k income, so that's pretty much inline with the 18-24 months at a $40k income if you just look at the numbers. Getting really intense and cutting back was probably easier since the end was not so far away (although we did start out thinking it was going to take us 18 months - then kept tweaking the budget and making lifestyle changes and ended up doing baby step 2 in 6 months). Another 6 months to finish "baby step 3" (3-6 months of living expenses in an Emergency Fund - we did 6 months). One thing that has really helped us is that we're not in over our heads in house. Our mortgage payment is at about 21% of take-home, which is in the range Dave advocates...and I can see why, because it does give us lots of breathing room...of course we'll have even more breathing room once it is paid off! (we're on track for that in 2013).

Best of luck!

 

[global_mom]

Thanks for the replys so far! I am still just amazed at how it can be done so fast. I wish that I could be a "fly on the wall" to see exactly how some people are doing it.

Our situation is not bad but having any monthly payments (other than our home) really bugs me. It does not bother DH so that is a part of the problem. Although with gas almost $4 a gallon he is starting to change his tune!

I have tweaked the budget and cut out so many things like too much eating out etc. I dont think that we will be able to be as "gazelle-intense" as Dave recommends but I would like to funnel any extra money to the debt. DH is a Realtor thus he is self-employed, so we have tax issues that can eat a ton of cash. We just paid our taxes and the bill for federal alone was $30,000! I had it saved up plus the money for state taxes, and SS tax but now the accounts are slim and that scares me.

The snowball is one thing that I cant get a good grip on. How do you find the discipline to really keep making the larger payments?

We dont have much CC debt b/c I usually pay that off each month (I am a TA and thus put large travel expenses on the card and then pay it when the bill comes or call in a payment) but I want to get the cars (total of $30,000) paid and get DVC paid. Then I can start chunking money toward the mortgage and more to retirement.

Any other suggestions would be great!

 

[tonilea]

The snowball is one thing that I cant get a good grip on. How do you find the discipline to really keep making the larger payments?


Any other suggestions would be great!

It gets really exciting to see the balances drop like a rock with those big payments.

 

[Chicago526]

The snowball is one thing that I cant get a good grip on. How do you find the discipline to really keep making the larger payments?

That was my biggest thing too. Personally, I treat the snow ball as my REAL minimum, I don't give myself a choice about paying extra to the one card. I figured out what I needed to put extra towards it and THAT is my new minimum as far as I'm concerned. Like Nike says, I just do it!

My biggest problem is that any extra money I get never makes it to pay it down faster. Take next month for example. DH and I get paid bi-weekley, which means that two months a year we get three pay checks in a month instead of the two we budget on. So it's like getting paid extra in those two months. On top of that, we're scheduled to get our stimulis rebate in May. Between the the rebate and the extra pay that was going to be about $3500 extra next month. Oh Boy! I can pay down the debt and shave six months off our repayment plan!

Wrong!

DH had three MRI's done, our share after insurance is $1200. Then we had a bunch of other unexpected expenses. Car repair, vet bill, shower gift for my boss's daughter -don't ask-, and DH decides our front walk needs to be replaced, and so does the back roof. Then there are our normal planed expenses for May, like MOther's day, two wedding aniversaries, four immediate family birthdays that require gifts, landscaping and gardening stuff needs to start for the summer, I could go on for ever.

In short, bye-bye extra money. I may have a bit left to toss at the CC debt but not much. The next "extra pay" pay month is right before Christmas, so that will go towards Christmas gifts and end of the year expenses that always seem to crop up. And my company has warned we won't get our bonuses this year (hey, at least they warned us!).

Anyway, this is why it's important to keep up on the snow ball. You can't always count on the extra money to bail you out, because it never seems to fail, you get extra money just about the time you get extra expenses!

 

[KristinU]

The snowball is one thing that I cant get a good grip on. How do you find the discipline to really keep making the larger payments?

Any other suggestions would be great!

It gets really exciting to see the balances drop like a rock with those big payments.

Yes, seeing the progress is really motivating! Also, once we had our written budget on paper (or on screen in Excel, as it were) we simply started living by it - if its not in the budget we don't do it/buy it. That and when we "woke up" to $34k of debt we got really angry about it and at ourselves and just wanted out.

 

[tinaluis]

The snowball is one thing that I cant get a good grip on. How do you find the discipline to really keep making the larger payments?

We dont have much CC debt b/c I usually pay that off each month (I am a TA and thus put large travel expenses on the card and then pay it when the bill comes or call in a payment) but I want to get the cars (total of $30,000) paid and get DVC paid. Then I can start chunking money toward the mortgage and more to retirement.

Any other suggestions would be great!

When planning your budget be sure to include a little fun $$ or it won't work. That way when you have extra $$ it will not be so hard to include it in your debt snowball. And set up your accounts so you can check the balances online. As dorky as it sounds, I get a great feeling from watching the balance go steadily down.

It's hard to stick to sometimes. DH and I are a one income family and we're down to our mortgage now. We paid cash for our last vehicle and plan to keep it until it dies. If we pay an extra $800 a month on our mortgage we'll have it paid off in 2.8 years and we tried it for a few months and felt like we were, literally, starving. (I know $800 is a lot of $$ -- it is to us too, it was, literally every $$ left over after utilities, groceries and gas were paid.) So we decided that we'll pay an extra $100 on the mortgage, put at least $350 in savings each month and direct any extra at the end of the month to the mortgage. It will take us about 3 years longer to pay off the mortgage but we'll still have it paid off in 19 years total as opposed to 30. Not as good as 15, but still better than 30.