How does your DR plan differ?

**Preston** · 08-24-2009, 11:42 AM

I have read several people on here mention they are on a 'modified' version of the Dave Ramsey baby step plan. I'm just curious as to what these entail. I'll post mine here

1) My initial EF was $500. Once I got to that point I started on baby step 2. I added $100 a month until it got up to the $1000.

2) I still have a credit card I continue to use. I get 5% back on gas and pay at the pump so I am not tempted to buy anything inside. I also use this same card for everyday expenses -- I still stick to my budget and pay it in full every month. I cannot carry cash on my person ( I work in an environment where we cannot carry significant amounts of cash.)

3) Despite still being on baby step #2 I am already starting to invest. our union contract negotiated us to get a 3% raise this year. Instead of just pocketing this money, I now put 3% of my income into a 401k. My paychecks are the same.

4) I pay extra every mortgage payment despite only being on step two. It's only $50 extra right now, but I figure every extra bit of principal knocked out earlier helps in the long run.

5) I took out a 30 year mortgage instead of a 15 year to help keep our fixed monthly costs lower. Once all the other debt is gone, EF funded and retirement squared away, I have a plan that I can pay off this mortgage in seven years.

6) I still put $100 a month into EF despite having baby step #1 done. Current balance is around $1800.

**Denvergirlie** · 08-24-2009, 04:16 PM

My BEF was more than $1K.... $3K in fact was my number due to possible storm clouds with my job.

I kept my 401K contributions at 6% in BS2 (Although are stopped now due to loss of 5% salary reduction and company stopped matching the 401K in May 2009)

In BS3 now, the FFEF is done with 6 months, but working on sub steps of car replacement (BS3.1), maternity fund(BS 3.2) and then land purchase (BS3.3).

Will start up IRA in 2010, even thou will still be working on land purchase fund, but car replacement and maternity should be done by 2010 as well.

**a.nonymous** · 08-24-2009, 04:21 PM

Our DR plan does not differ from the original except that the numbers are applied to €€ instead of $$.

And truth be told, I don't see any valid reason why it should differ. In my opinion, the only exception is when you have to expect some irregular expenses lying directly ahead and having absolutely no way of avoiding them (and even catering for those situations is part of the DR plan).

**Greebo** · 08-24-2009, 07:39 PM

1) We are putting extra money into our EF even while we are not completely debt free. In other words, we've started step 3 a little early.

2) We are putting extra money on the car AND on the HELOC simultaneously. The car debt is paid by us, the HELOC is paid by our business.

3) We are starting to look at options for buying an additional asset that might (SHOCK!) include taking on more debt. Yes, I'm coming out and saying that there are some kinds of debt for which I think Mr. Ramsey may be a little overly risk averse, and debt that makes you money - when done EXTREMELY cautiously and with tremendous research and planning, may be one of those areas.