Debt Snowball

[ChoochCharlie]

I am a big fan of Dave Ramsey. *Try to listen to him when I can.
I am working into the Baby Steps but keep running into the same old Murphy's Law things. *Car dies, check bounces when EZ Pass goes through early, etc.

His message fits right in with what I think we all feel and follow here. *
Debt is dumb. Cash is king. *And the paid off mortgage is taking the place of the BMW as the status symbol of choice.

Check him out. *You can even listen on-line. *His show is purely call in. *People with problems like yours. *But best of all, people call in with success stories. *Families that have paid off 5 and 6 figures of debt to be able to scream at the top of their lungs on national radio "I'm Debt Free !!"

[Cattails]

Thanks for the info about Dave Ramsey. Would you happen to have a link to a community/message board for people following his plan? I was just getting into posting there about a year or so ago when my computer crashed and I lost everything including that url. When I try to find it now, all I can find is a message board that charges you to join. Do you or anyone know how I can find it again? I sure need his help, we're on the verge of going under and losing everything. I desperately need help but can't afford to buy everything he is selling. That board was great!

[Shamrock1121]

I'm a fan of Dave Ramsey, too. I get inspired by the people who scream "I'm debt free" on the show. One more (big) payment on the car and we'll be debt-free, with the exception of the house. I dumped as much on the car debt as possible - not quite a rice and beans diet, but close ;). Then we can knock the house debt out in a few more years. We're even going to 1 car, instead of 2, to help get rid of the house debt.

-Karen

[leera]

I know what you mean,although I've never heard of Dave Ramsey.

The car breaks,you end up late on bills to pay for car repair.......I just did that two weeks ago......didn't bounce anything though.

We are working on getting things paid down.........we nearly lost everything a few years ago,but decided that Bankruptcy was not the direction we wanted to go.

We created our debts,and no one should have to pay them but us.

Odd in these days I know,but that was where we stood.

Hubby and I didn't want to do what his parents are infamous for.........run up debts to the point of no return,then file bankruptcy......repeat every 7-10 years.

So sought out a nonprofit credit counselor.........our debts are now just under $20,000.00---------down from nearly $42,000.00 two years ago.They way things are set now.....the credit debts,the car,the mobile home will all be paid off around the same time........freeing up 75-80% of our income.......which will then be put into savings to pay CASH for our property.

In the mean time we have managed to invest in retirement savings,and 401K at work.The 401K is an extra,and will be cashed out early to help pay for our property when we get that far.(Even with the early withdrawl penalties I'm not out anything,the Co.I work for does a 100% match,and the first $1800.00 was a bonus from a company buy out anyway.)

Rambling..sorry........ :)

[nancy1340]

Good on you Leera. ;)

[spygrl]

I have never heard of this guy, I found his website and I hope this is correct: http://www.daveramsey.com/

My husband and I just wrote a big check and paid off car #1. We also have another debt about to be paid off around the 15th of Sept. and then one more debt will be paid in a few weeks as well. We will only have 2 debts left. I handle the finances in the family and I have been putting away $50-$75 a week, if possible to pay some of these debts off. Our taxes last year helped toward one debt to reduce it quite a bit. We also went through CCC to help get out of debt. I know one thing: I never want to go back into debt again (maybe a mortgage but I would do everything to pay it off early).

We also live simply and have no kids. We rent an apartment in a nice neighborhood and it is inexpensive compared to renting a house or a bigger apartment. We have big goals come next Sept/Oct 2007. We should be out of debt by then. Then it is the Big Move.

Keep up the positive outlook Leera and everybody else paying down debt. It can be done. 8)

[Honey_Berry]

There is another website run by Dave Ramsey followers that has a message board and is a free site. The folks at this site are fans of Dave Ramsey and follow his money philosophies and are in various stages of working the 7 Baby Steps.

www.livinglikenooneelse.com

[AgnesNutter]

Dave Ramsey has quite the racket going. I am a "fan" of his methods...the office I work at was even one of the "Endorsed Local Providers" you see linked on his website and referred to in the show.

Let me tell you, it costs a pretty penny for that "endorsement." And then, of course, he mentions the main agency listed prominently on the site. ::)

Conflicting message...."talk to my guy at xxxx for your life insurance" or... "talk to one of these Endorsed Local Providers."

The concept itself is fine... gather a network of like-minded people in various "financial" fields to refer listeners to...and even requiring a bit of payment for the privilege I didn't have as much problem on. You don't value what comes free. But it was a pretty high amount, and then he proceeded to to do an end-run by endorsing that OTHER place on his site.

The books, the Financial Peace University kits (you can't just show up at the class held at your church; you have to purchase the books/workbooks, etc)., all for stuff my mother and my grandfather had been telling me about since the time I was small.

Quite the racket. ;D But he is fun to listen to.

And yeah, not everyone has that education from their parents. The leader of my young adult church group tried to get me to enroll in the Financial Peace University course starting, and I just laughed!

However, my boss just announced a raise this week, so my debt snowball should be getting a fair bit bigger soon. ;D

[ChoochCharlie]

"all for stuff my mother and my grandfather had been telling me about since the time I was small."

See, my parents and grandparents had it all wrong and taught me the mistakes.
Dave is changing my entire family. My wife and I are getting straight and passing the info on to our parents and family. It is very strange watching your parents make HUGE financial blunders at their age. God bless them though, they are trying.

[mangyhyena]

We have been working to eliminate our debt for over 2 years. I read Dave Ramsey's book, Total Money Makeover, shortly after we began.

We've paid off two credit cards and our truck. And I will have paid off my last credit card in November of this year. After that we'll be debt-free except for the mortgage. The mortgage will be gone after we sell the house. We're going to move to a cheaper cost-of-living state and purchase the next house outright. Lucky me, I get to transfer my job so I've got the income covered as well after the move.

It took me working 2 full time jobs for over 2 years to accomplish this. But there was a big benefit to this. My wife stays home with our 2 children; No babysitters. And better still, we'll be home schooling the children!

So in December we will, for the first time, begin dumping everything we were paying out to credit cards and truck payments into a savings account. We are going to continue on at this pace for the next 3 years ideally, 2 years minimum, then use the money in savings and the equity in our house after it sells to move into total debt-freeness. (Not a real word but it is a way of life)

While some may want it as much as I do, no one want it more than I want it. ;D

The only thing I disagree with Dave on is the investments he suggests. I think 401K accounts and mutual funds will fail in the long run because with the attack on the middle class right now, I believe all but the wealthy will be fleeced. I believe a serious recession, possibly a depression, is on the horizon. And when it hits 401K accounts, many stocks, and mutual funds will become worthless. Just an opinion of mine.

When we purchase our next place I intend to be off the grid, produce large quantities of bio-diesel, and grow a large percentage of our food. In this way I'm trying to stagnate our cost of living while I continue accumulating raises. My goal is $600 per month for the cost of living. I may not be able to make it that low but that is the goal. It will allow my wife to continue staying home, me to work a pidley 40 hours per week, and our savings account to continue growing.

So, eliminating debt can be done. It is possible-- if you want it bad enough. When you've had enough of other people taking most of your paychecks then grit your teeth and do what you have to do to get debt-free. Let nothing stand in your way. One foot in front of the other and don't stop for nothing. Good luck.

[billy_goat_gruff]

The wife looked at her W-4 and asked where did it all go... I told her what I found 10 years ago but said had no clue as to today. Looked back then because there are things out there that are nasty. Suffice it to say that Big Bro had a very wonderful senior year in high school... :) I'm not going to gripe about that.

She wanted to do the Financial Peace University course so we are. It is cheaper than one marriage counseling session for the kit and gives us an opportunity to talk about money.

It isn't what I learned from my parents and grandparents but is similar. In essence it seems his plan is to spend the money on paper, then go turn loose of the cash. My parents / grandparents taught the 80-10-10 rule (80% you live on, 10% you save, 10% you do random acts of kindness with.)

Either way one knows where and how much is going exactly where. Different bookkeeping system...

He does have a nice thing going. It's a shame that folks have forgotten that convenience is costly and that immediate gratification often leads to later worries. Might as well make everyone mad and state the other truth in the matter too - the only discipline that counts is self-discipline. External discipline is slavery by another name (yuppers, even with kids. :D ;D )

[leera]

I was doing some cleaning yesterday and came across our contract with our credit counselor.

We're almost there!!!

The way I have it figured,the payment we make on Oct 22 will be our FINAL payment,and we will be 100% credit card debt free!!

We're going to take the money after that and get our mobile home and car paid off.Which will be another 7 months or so,but by next summer we should be able to start looking for our property! ;D ;D

[JakeLeg]

dave's pretty good. i just wish he'd pull all the christian crap out. i "acquired" the 15-cd audio version of his "financial peace university" speeches. burned it into 1 MP3 CD to listen to in the truck. pretty interesting. wife and i had already done pretty much everything that he discusses, after figuring out the whole game for ourselves.

haven't had a credit card in years.

paid off one of the mortgages a few months back (had to take out a small 2nd mortgage in order to avoid PMI) it was a 15-year that was paid off in 2yrs 2 months

student loan is next. will be paid off several years ahead of schedule (had to have student loans cuz i paid my own way through college)

then it's just the main mortgage. the 30 year term taken out in 2004 can likely be paid off in 2011 if we keep our current income.

otherwise everything else is paid in cash.

[ryanmercer]

I"d be good on my 'debt snowball' if I could just find someone to give me a consolidation loan for my CC's.

[billy_goat_gruff]

Will agree with JakeLeg that most of it can be figured out based on observations (assuming that is what you meant to say...) of financial doings around us.

In essence (what I heard anyway,) one should always know what they are buying and what price they are paying. Being totally aware of what one is buying makes the rest fall into place. Informed self-interest I totally agree with. With credit cards one is buying the use of someone else's money for a period of time. If that is what one wants to buy, well, I'm not going to tell them they are wrong. It is their money to buy whatever with.

Third week - the message was that men and women are different in handling money, that opposites in outlook attract in the game of love. The weird part for me was that the opposites were labeled "nerds" and "free spirits," BUT... It turns out that about half of the nerds are women in our class and the other half of the nerd group are men. Uh, sounds like the nerd group as a whole handle money very similarly even though it is comprised of both men and women. So much for the first part of the message, in my mind at least. It seemed to me that it turned into a bit of a sales pitch for teaching kids how to handle money with a bit of "tough love" disciplinary training thrown in.

I'm still buying opportunity to visit with the wife on a subject that is a land mine area, so I'm happy.

What gets me is that some of the arguments Dave uses can be used for many other things. Example: money is amoral (straight out of the book.) Well, that can be used for guns, bombs, etc. Just tools (amoral part), the good or bad comes from the use of the tools.

So, of course my mind took it to the next level... Wouldn't it be nice to have an amoral government - one that was just a tool? Oh, yeah, that is what we do have. But the uses that tool is put to... *:D *;D *;D

Yeah, maybe that is trolling a bit... BUT...

Yours for enlightened trolling,

gruff (former nic - littlest troll *;D )

[leera]

ryanmercer............we couldn't have gotten a debt consolidation loan if we tried,at the time...........we went with a non profit credit counselor.........just a thought you could check into where you are..........be careful,any company that says they can eliminate your debts is going to do as much or more damage to your credit as a bankruptcy.........

Credit counseling is not the same as debt management..........

[ryanmercer]

ryanmercer............we couldn't have gotten a debt consolidation loan if we tried,at the time...........we went with a non profit credit counselor.........just a thought you could check into where you are..........be careful,any company that says they can eliminate your debts is going to do as much or more damage to your credit as a bankruptcy.........

Credit counseling is not the same as debt management..........


Yeah I know. I just picked up the phone and argued with the cc companies until they negotiated me better rates... still outrageous but much better than they were... that'll have to do.

[ChoochCharlie]

I'M DEBT FREEEEEEEEEE !!
I doubt I will ever get through to Dave so I'm yelling here.

110K - Dumb house investment. Don't watch late night TV.
4K - Discover Card
1K - Sears card.
2K - Misc debts
DONE ! Paid. Owe no one in the world.

We figured out we could have been debt free 3 times in 12 years of marriage, but never really understood the bondage we were in to creditors. We kept keeping the credit cards and not paying them off and spending the cash on fun stuff. Now without the debt, it's all fun stuff.
I feel like I got a raise with the credit payments gone.

WOOO HOOOOOO.

[gump]

I'M DEBT FREEEEEEEEEE !!
I doubt I will ever get through to Dave so I'm yelling here.

110K - Dumb house investment. *Don't watch late night TV.
4K * * - Discover Card
1K * * - Sears card. *
2K * * - Misc debts
DONE ! Paid. Owe no one in the world.

We figured out we could have been debt free 3 times in 12 years of marriage, but never really understood the bondage we were in to creditors. *We kept keeping the credit cards and not paying them off and spending the cash on fun stuff. *Now without the debt, it's all fun stuff. *
I feel like I got a raise with the credit payments gone.

WOOO HOOOOOO.

You don't owe property taxes each year? :D

[machinemaker]

ChoochCharlie,
Good for you!!!!
Kristine and I took financial peace course after starting similar strategies we found by author Mary Hunt several years ago. Payed off the debts, have a cash emergency fund, use a freedom account for non-regular expenses, my business is debt free, have savings, shoot we even have money saved for a vacation this winter. Our only debt is the mortgage, and it will be done in 3 years of putting extra principle on it.
kent

[johnjmw]

Dave Ramsey's class is quite an eye opener for anyone who never worked on a real budget (like me and my wife) It looks to me that the only thing we had done right is buy a piece of property and get it paid off fast. Now if only we had done that with our mortgage. There are all sorts of people who have no clue how bad a shape they are in financially until it is too late.
I know, I was headed there really fast. I happened to have changed churches and our new church was getting into "Financial Peace" and hosting some of the classes. Yes he (Dave) has quite a racket going but look at how many people are (some for the first time) finally getting off the merry go round of credit cards and huge debt. I cannot blame him for turning a buck while helping others. My wife and I were starting to dig a deep hole. Now we are really getting ahead of the game.
I don't know how many of the facts Dave quotes are true but they do bring to light exactly how middle and lower income people are fooled into staying there or getting into worse shape and loosing it all.

[farmerj]

aw hell, and I thought I was doing bad with only $7K in debt and over half that is medical bills.:-/

With luck, it should all be gone by summer... ;)