Charged off debt and car repairs....just starting out.

[kendalynsmom]

I am a major newbie just about to take the leap into "Ramsey Land". I have read Total Money Makeover and reread several sections a few times. I have a couple of question first if anyone can help me.

Both of our paid for vehicles need a repair. Should I do that first and then start on the $1000 emergency fund?

After I have my $1000 and I start the snowball, should I include things on my credit that have been charged off?

During the time the $1000 is being saved up, do I use a budget only for the bare necessities? Then, when the $1000 is secure and I start the snowball, I expand the budget to include things like oil changes and kids clothes? Where do I fit these things in? Before or after the $1000?

Thanks in advance!

[Greebo]

I am a major newbie just about to take the leap into "Ramsey Land". I have read Total Money Makeover and reread several sections a few times. I have a couple of question first if anyone can help me.

Both of our paid for vehicles need a repair. Should I do that first and then start on the $1000 emergency fund?

Your budget should be priority driven. Your priorities should start with:
1) Food
2) Shelter (mortgage/rent/utilities)
3) Transportation (car pmts, insurance, and maintenance)
4) Clothing
5... Mandatory expenses including MINIMUM payments on debts
6... Optional expenses WITHIN REASON (blow money for example)
7. Your TMMO baby step.

All of the above being the ESSENTIALS, not frills, the goal being to get #7 as big as possible but never to sacrifice the essentials to get there.

Car maintenance should get some money set aside every month in a growing fund that can be used as needed. How much you'll have to figure out based on your average maint/repair costs each year, but generally speaking, car maintenance/repairs that are *necessary* are a priority.

After I have my $1000 and I start the snowball, should I include things on my credit that have been charged off?

If they're not calling you right now, no. Let sleeping dogs lie until the barkers have been dealt with. If they're barking now, throw em a bone.

During the time the $1000 is being saved up, do I use a budget only for the bare necessities? Then, when the $1000 is secure and I start the snowball, I expand the budget to include things like oil changes and kids clothes? Where do I fit these things in? Before or after the $1000?

If you're current on all active debts, then you still use the priorities listed above.

If you're behind on active debts and bleeding money (late fees, over limit fees, etc) then you must STOP THE BLEEDING before you even start on the $1,000.