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Face to Face with Debt

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5K views 30 replies 13 participants last post by  sinopa27 
#1 ·
Hello my dear FV friends!
Well, I got my signature with all my debts listed. I am starting today to Face my debt. I, Sinopa, am in debt. I no longer want to be in debt. I hate all this debt. I don't want to be a slave to debt. Thus, I will stop adding to my debt and do what I can to reduce my debt.
WHEW!!!!!

I want to do the Baby Steps by Dave Ramsey.

*signature has debts*
 
#3 ·
I don't know where to begin! I know I feel better just admitting that I am in debt. I am looking for lots of ideas and encouragement.
 
#29 ·
go to the dave ramsey website, and click on the button called "listen now" listen to the radio archives.

i used to listen to the whole week while cleaning house on a saturday.
 
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#4 ·
I don't follow the Dave Ramsey programme (no debt), but basically, if I remember correctly, you pay minimums on all your debts, build a $ 1000 EF, and then pick 1 debt at which you throw ALL the excess money.

Keep paying minimums on the other debts. You can pick the debt with the highest interest, or with the lowest amount, or which you hate the most.

Once this is paid off, you throw the excess money + the minimum payment of the paid-off debt to the next debt.
 
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#5 ·
A detailed walkthrough of how to do the Dave Ramsey plan is here:
Expanded Dave Ramsey Baby Steps

These are the first things you need to do even before Baby Step 1:
0.1: Commit to NEVER borrow $$$ EVER for ANYTHING other than possibly a 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

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

0.6 Amputate "toys" (bikes, boats, ATV's etc) if they will keep you from completing the snowball within 12 months

0.7 Cut lifestyle (Cut CATV, Cellphone, Regular phone "extra's", Internet, Eating out, etc) and/or take second job if $1000 EF will take more than 30-90 days. (depending on income)

0.8 Get current on ALL bills
What kind of help do you need with those first steps? Often, I find that people need help working out a budget because a scary number of people have never ever really used one before.
 
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#6 ·
Good job for admitting the problem. If Ramsey is your choice follow the steps listed above. It will work, but rather like weight loss. You didn't get in this mess overnight and you won't get out overnight. Your cc balances should be doable quickly after your EF. Good luck and keep us posted. It's scary but worth it.
 
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#7 ·
"The journey of 10,000 miles begins with a single step"
Congratulations on starting the journey. There will be bumps in road, but the keep you sights on the destination. All of us who are already there want as many people as possible to join us!
 
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#8 ·
you can do this. i paid off between roughly 8000 credit card bills from a divorce. my financial recovery took two years.

the kind people here told me to unplug everything. Go around your house and ask yourself - why is the sewing machine plugged in? why is the blender plugged in? then go to CVS or walgreens and buy power strips. i put them on the TV area and the microwave area. The computer area already had a surge protector. Become a power miser. "why are those lights on? why is "that" glowing? i saw an immediate savings of 100 a month by doing this.

then that summer, i turned my air conditioner to 78 and sucked it up for two consecutive summers. my summer houston texas bill went from roughly 400-500 a month to roughly 200 a month.

a good friend who was an accountant came over and she reviewed all my bills. she had been through a divorce too. she set up an excel spreadsheet budget with all my bills including those that were paid yearly. every month we set aside 1/12 of the bills in the account. she had me open a savings account to put those funds. She reviewed with me that i could no longer pick up the tab and other stuff. she taught me the newly divorced budget and strategies.

i turned off cable and cried all the way returning the boxes, cussing the exhusband. i bought one of those convertor boxes. replacement entertainment became listening to dave ramsey on th internet - the radio archives on his website - while i cleaned house or puttered.

i learned from FVers to meal plan, shop with a list and a calculator to keep a running total. i planned meatless meals almost everyday. (this was a mistake because i developed pernicious B-12 anemia) if i had to do over again, i would have had a better diet.

i stayed out of restaurants. i cooked at home and had intentional leftovers for lunch the next day. i planed meals to cascade: like roast chicken for sunday, chicken tacos for monday, chicken soup for tuesday...

i stopped using the dishwasher and carefully handwashed the dishes. i discovered that if i used the dishwasher my electricity bill jumped by 30 dollars.

i told the pets not to get sick.

i washed everything in cold and used half the detergent. hang to dry.

i didn't get my hair cut. i just put it into a chignon for two years.

i hope this helps. everybody's financial recovery is different!
 
#9 ·
here is my budget now. it looks very different from when i first started.

monthly
elec
water
nat gas
lawn
gasoline
groceries/supplies
tithe/fast offering
prescription drugs
dining with friend
credit report
bundled service ATT
haircut
pocket money

sinking funds
escrow (taxes/ins)
trash
home maintenance
home owners association
flood insurance
termite contract
a/c heat maintenance
oil change
car maintenance
car insurance
car registration
car inspection
toll road tag
car replacement
endocrinologist
optometrist
dentist
co-pays
vet bills
tax prep
office max
stamps
xmas
school startup
shoes orthopedic
work holiday parties
travel summer
 
#10 ·
You did great taking the 1st step by admitting it and wanting to change! Yeah!!!!!! IF we could pay of $46,000 in non mortgage debt anyone can.

Get that baby emergency fund saved up while paying those bare minimums then follow the rest of the baby steps.

One thing that helped us a lot to save up the baby EF and cut costs was for me to read every book on frugality and cutting costs I could get my hands on.
 
#18 ·
One thing that helped us a lot to save up the baby EF and cut costs was for me to read every book on frugality and cutting costs I could get my hands on.
I agree however obtain the books thru Interlibrary loan you might also consider subscribing to as many online frugality blogs as possible. There are several out there but I like including The Simple Dollar and Stretcher.com.
 
#11 ·
Congratulations on taking the first step and wanting to take charge of your debt. You will find tons of tips and useful information, everything from cutting electricity, meal planning to making your own detergent. Start focusing on you BEF and you will be off and running! Great job!
 
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#16 ·
do the dave ramsey for steps 1-3, then re-assess where you are. just because it didn't work for me, doesn't mean it won't work for you.

i listen to dave everyday for focus and strongly encourage you to attend his classes called financial peace university.

edited to add: do dave for steps 1-3. he is strong in this area. mary hunt is strong in steps 3-6. do what works for you.
 
#17 ·
I agree with Lady Kemma in that you can do this. I have so far paid off $57, 061 toward debt since January 2008.

I am doing many of the same things she did. I unplug all items which I am not currently using. I also switched to flurescent bulbs. I brought a toaster oven at the Salvation Army for $10.00 and use it instead of the regular oven all summer long.

I also set my air conditioner on 80 and use box fans and live in sundresses all summer. My A/C bills never went over $30.00.

I gave away my television (I could not take all of the advertising and got sick of all of my time being spent in front of the television), disconnected my computer and my home phone. (I have a cell phone which I only have basic service- no internet.) I listen to Dave Ramsey daily on the radio. I discontinued my netflix plan. I read, read, read and the public library is my best friend. When I see a book advertised on AMAZON I immediately put in a request thru my public library interlibrary loan for it.

I purchased cookbooks which had recipes of the Great Depression and learned to S-T-R-E-T-C-H my meat and I stopped eating expensive cuts of meat and eat lots of chicken and turkey when it goes on sale. (no not hot dogs or lunch meat etc.) I also only eat out a couple of times a year and then it is to the $7.00 Chineese buffet. I make everything from scratch. I do make large meals and freeze them into individual portions so that I have variety.

I also stopped using my dishwasher and wash everything by hand. I am experimenting on making homemade dishwashing liquid. I purposefully do not own a clothes dryer and so air dry everything.
I also wash everything in cold water.

I learned to do all of my own hair care including cut and color.

I stopped shopping for entertainment. I was addicted to thrift store shopping.

I kept my car versus trading up it is currently seven years old.

The biggest thing is that I had to retrain my mind/attitude that I did not need all of the materialistic items which I thought were needs but were really wants. I am alot happier now that I am slowly climbing out of the debt jungle.

Good luck to you. The people on here are "tops" and they will help you with any/every thing related to the frugal lifestyle. There are so many great tips on here on how to do things more frugally.
 
#19 ·
What a change I am going through. After writing down all my debt, I am not quick to spend money anymore. I look at it like, if I save this money, then I can apply towards what I already owe.
 
#20 ·
Change is a good thing :)

It's become a game here with me. Spending less all the time. We only have the house and one truck payment. Then the utilities, truck and fire insurance.
We had a nice garden this summer. I been canning, freezing, and stocking the pantry. Grocery bill is low. I track the electric usuage daily. Always challenging myself to maintain or do better.
 
#21 ·
to avoid burnout, do something nice for yourself at significant milestones.
 
#23 ·
ladykemma2....I was wondering if anyone got burned out from trying to save and just quit saving.
I guess I could treat myself to certain things that I "think" I need when I do good.
Thanks!
 
#24 ·
do you have kids or a husband to consider?
 
#25 ·
In regards to burnout-

Sometimes i feel constrained by always thinking "i must keep vigilant, I must save save save" and its usually at that point when I take a step back and reassess the impact of my vigilance on quality of life. I think it takes time to build in new steps and practices (like anything) without it feeling overwhelming and imposing and that you are living a pauper's lifestyle. Everyone has a different set limit, but so long as you are plugging the obvious leaks, and can keep that up without too much hassle or pain for several months, then you are on the right path. From there you can graduate to advanced frugality!

I have noticed that in my case its certainly gone from "oh well, lets just pick up dinner tonight" to what can I make for dinner from what I have on hand. I actually prefer my own cooking now to eating out and I get a lot of personal satisfaction from cooking and enjoy the challenge of making good food on a limited budget. I also check myself on shopping for anything: "do I REALLY need this? can I fashion a substitute at home?". I tried going shopping the other week at the outlet mall with a set budget of $100- and i couldnt find anything I really HAD to have or that I wanted to part money with. Its amazing how fast money adds up when you plug the spending here and there.

Taking this step is an important one and this is a very supportive community- youll find all sorts of help in finding strategies to help you chip away at that debt.
 
#26 ·
i will do "no spend weeks", or "no restaurant weeks". i can be "gazelle intense" for about three months then i need a rest. but it's just me i don't have any backup.

a rest can be a break from saving, a little more spending money, a few dinners out (then my own cooking tastes good again), or an object.
 
#27 ·
Ladykemma2,
I have 2 daughters and I am separated from my husband who is now in Mexico.
 
#28 ·
Oh...ladykemma2, my daughters and I love to read. So, maybe I can make that a reward for me somehow.
 
#30 ·
I don't know your income of course but your debt is not that huge. I do notice you owe a little,alot of places. That is stressful and distracting. Just pick a small one and kill it as quickly as possible by paying the minimum on the rest. Actually I always pay a few $$ xtra when I pay. CC's divide you by minimum paid and more than minimum paid on credit ratings.
Make sure you have a $1000. in an e-fund first. One day at a time, one debt at a time. I made a chart and put it on the wall. I put notes w/ balances in my wallet. Get mad at debt. Anihilate,nuke it, feel the weight side off. You can do it.
 
#31 ·
Yep....I owe a little in a lot of place and it is stressful. Keeping up with the different due dates is crazy!! I like what you said, "get mad at debt." That's how I feel now!!
thank you so much!!
 
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