Getting out of Debt

Do you want to get out of debt? Start living on a budget? Be able to start saving? Some  use Dave Ramsey's method but please join me even if you're following someone else/your own plan. All are welcome!








Here's DR's plan:



Pre-Step 1: Get current on your debts and do a budget

0.1 No new borrowing. (We will still be trying to get a loan to finish the house)

0.2 Talk with spouse and get him/her on the same page as you concerning finances.

0.3 Do a written budget

0.4 Temporarily stop all retirement contributions (We still pay into Freds 401k)

0.5 Get current on all the basics (Shelter, Food, Utilities, Basic clothing)

0.6 Amputate "toys" (bikes, boats, ATV's etc) to help snowball

0.7 Cut lifestyle (Cut cable, cell, extras, eating out) and/or get a second job to raise $1000 EF.

0.8 Get current on ALL bills



BS1 $1,000 to start an Emergency Fund

1.1 Chop up/freeze CC's (You have an EF now)

1.2 Get Health insurance NOW if in the US

1.3 Get Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died.

1.4 Amputate cars that you can't pay off within 24 months

We keep more then $1,000.

BS2 Pay off all debt using the Debt Snowball

2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest.



BS3 Three to six months of expenses in savings

3.1 Start car replacement fund

3.2 Save up 20% for home purchase OR pay down existing mortgage to the point you can drop PMI.

3.3 Start furniture or other non-essential stuff replacement fund



BS4 Invest 15 percent of household income for retirement



BS5 College funding for children

If we have enough for us for retirement, then we will. If not we will try to help them anyway we can.


BS6 Pay off home early



BS7 Build wealth and give! Invest in mutual funds and real estate



Here's the link to Dave Ramsey's website: http://www.daveramsey.com or if you want a good DR discussion forum,http://www.llnoe.com is good but hardcore. Gail vax Oxlade's Til Debt do Us Part is great tv show, very motivating. Her website is:http://gailvazoxlade.com/blog Others like Suze Orman or Mary Hunt, really doesn't matter whose method you use, just start the process to getting out of debt.

  We are on babystep #2 We just sat down this last weekend and have a plan to have all debt payed off in 15 months...not counting our house. We also set up "Sinking funds".    The idea of sinking funds is to set money aside for things that will come up so that when they come up, you have the money and don't have to charge it or refigure your budget to pay for it.