Has anyone done Dave Ramsey?

[welly01]

DH and I half-heartedly started Dave Ramsey in January. We made good progress by paying off a personal loan and a vehicle loan. The last thing we have left is my student loan. But now that the holiday season is starting, I'm stressing about money again. Has anyone gone through the Dave Ramsey program?  How did you handle all the school stuff for kids?  Parties, Halloween candy, gift exchange.  Did anyone tell their family they wouldn't be buying gifts one year?  I feel so much guilt/obligation to participate in stuff.

[mustardseed2007]

I did - it's how we paid off all of our debt before we had kids. After our 2nd kid we kind of fell off the wagon a bit. The budgeting is just a lot to keep up with. But don't listen to me, his ideas are really good. For a long time it really spoke to me and during that time I was on top of my money and way less stressed than I am now.

[twinmomma]

I think according to Dave, you're supposed to just decline everything and tell your whole life that you're working on being debt free and that matters more. But I really struggle with that piece of it too.

One of the ways we try to tackle it is that we have designated "spending money" in our budget each week. And that money has to cover any random expenses that pop up and can't be covered by another budget line item. This could be something like a doctor visit copay, or a gift for a class party. Technically that's against the "rules" since you're supposed to account for every single dollar, and we keep that bit of money fluid each week, but it's working pretty well for us. Leading up to Christmas, we siphon off some of that spending money each week and buy presents on sale over time. So that way it's still technically coming out of our spending money and we're not dipping into other areas.

[welly01]

Oct 4, 2017 10:13:43 GMT -5 twinmomma said:

I think according to Dave, you're supposed to just decline everything and tell your whole life that you're working on being debt free and that matters more. But I really struggle with that piece of it too.

One of the ways we try to tackle it is that we have designated "spending money" in our budget each week. And that money has to cover any random expenses that pop up and can't be covered by another budget line item. This could be something like a doctor visit copay, or a gift for a class party. Technically that's against the "rules" since you're supposed to account for every single dollar, and we keep that bit of money fluid each week, but it's working pretty well for us. Leading up to Christmas, we siphon off some of that spending money each week and buy presents on sale over time. So that way it's still technically coming out of our spending money and we're not dipping into other areas.

In hindsight, we should have been putting a small amount to the side this summer in preparation for Christmas. But since we're still paying off debt, we weren't saving anything over the initial $1,000. I'm also struggling with still using my credit card. I just tell myself, "oh, I *need* this one little thing" and 3 months later it's $1,200. And with Christmas coming... Ugh. I WANT to do this program but dang, it's seriously hard to just STOP spending money.

[jlaok]

We did Dave Ramsey and paid off all of our debt in 2013 (before DD was born). We still participated in holiday activities but tried to be as economical as possible:

Halloween - We went to my parents neighborhood to let DS ToT. I helped my mom hand out candy but didn't buy any myself. DS had a costume but it wasn't anything crazy. His class had a party but I don't think parents had to volunteer to bring anything.

Thanksgiving - I would bring a dish and wine to each family's house but tried to make it things that weren't very expensive.

Christmas - We convinced both family's to exchange names instead of buying everyone a gift. It actually wasn't a tough sell and both sides still do it. DS got a couple of presents (1 from us and one from Santa). DH and I exchanged stockings but not presents.

It's kind of late for you to do this year but we have a separate checking account that we put money into each month for birthdays and Christmas. It is so nice because we never have to stress about how to pay for gifts. We also go into the holiday season knowing exactly how much we have to spend.

[twinmomma]

welly01, I totally hear you. I actually just don't carry my credit card with me anymore. I leave it at home unless I'm traveling or something where I might need it for an emergency. And our weekly spending money goes into a separate checking account, with its own debit card. It's made me A LOT more accountable, because I can see that balance dropping every week and understand exactly what I have left to use. The money transfers in on Monday and it's all we get until the next week. It sucks having to decline fun random activities, but it's definitely make me better about overspending.

[waverly]

Parties- I consider as an entertainment fee- I assume you mean kids birthday parties? So, I think you could get away with spending $10-$15 here.
We can't send food, and dollar store stuff gets old, so I might not send anything for school parties. Halloween- I do buy costumes, I consider it a waste though since my kids are not dress up type kids, so they pretty much wear it once. If you are crafty you could try to make one. I feel like my kids are soo picky though- I would try to make something and they would be like nope. Halloween candy is not that expensive maybe $10. When you run out you run out, put a sign on the door and turn off your porch light.

Christmas is really the big money sucker here, I think personally. My family refuses to just buy for the kids, so my list is like $20 people. If you have a crazy list like that I would just try to cut it down and put a cap on it. Or even a token gift or handmade gift. There are a few on pinterest you could make like sugar scrub in a fancy jar. And just give to everyone. I have definitely thought of doing that but never went through with it. So for my 20 people, I have about a $20 limit pp and so it only ends up at $400. More for immediate family. For the kids, I go to the local church sale and get stuff used there. I also do wear, read, need, want to limit gifts. Then H comes along and blows up my budget like he does everything else (read below). But otherwise I use left over gift cards for presents (buying presents for other people with them) and track sales. Dave would say you have to budget and save for it. He would say if you are not able to budget and save for Christmas then don't do it. I know one year when H was in school we didn't give presents (or bare minimum like $5 a person). It was fine, and I am sure people in the family have forgotten all about it. Even if they were offended at the time, it didn't matter to me. To be offended like that when we explained why- they quickly got over it.


We did in 2003-2006 ish to pay off DH's debt that he had prior to us living together. Honestly it was pretty easy because we were snowballing and saw some momentum, and then the rest was just a monthly payment.

However, what I have found with DH, later on is that his spending habits are cyclical. Once again we paid off all our debt just from income- no plan in 2016 (new roof and some CC debt, both cars already paid off).

And now we are in CC debt again, mostly his spending. So I really need to take his CC away. However, he just got a new job and has a plan to pay off again.

But my issue is what happens when he isn't working? When he is retired, he will have no recourse in paying things off? So I have to break the cycle.

My plan is a contract, but I think I am waiting for him to settle into new job and we have a tax issue to solve. We need a CPA because even with past tax issue, we will have current tax issues since his new job has sent us up a bracket, and its getting to the point of ridiculous- not that I mind paying taxes and helping people out, just that it is crazy.

I agree DH and I both need to use our debit card and not the CC.  Using a CC causes people to spend 20% more. 

[justcheckingin73]

Oct 4, 2017 10:19:44 GMT -5 welly01 said:

Oct 4, 2017 10:13:43 GMT -5 twinmomma said:

I think according to Dave, you're supposed to just decline everything and tell your whole life that you're working on being debt free and that matters more. But I really struggle with that piece of it too.

One of the ways we try to tackle it is that we have designated "spending money" in our budget each week. And that money has to cover any random expenses that pop up and can't be covered by another budget line item. This could be something like a doctor visit copay, or a gift for a class party. Technically that's against the "rules" since you're supposed to account for every single dollar, and we keep that bit of money fluid each week, but it's working pretty well for us. Leading up to Christmas, we siphon off some of that spending money each week and buy presents on sale over time. So that way it's still technically coming out of our spending money and we're not dipping into other areas.

In hindsight, we should have been putting a small amount to the side this summer in preparation for Christmas. But since we're still paying off debt, we weren't saving anything over the initial $1,000. I'm also struggling with still using my credit card. I just tell myself, "oh, I *need* this one little thing" and 3 months later it's $1,200. And with Christmas coming... Ugh. I WANT to do this program but dang, it's seriously hard to just STOP spending money.

I have not done Dave Ramsey but I can relate to the spending too. Ugh my cc is unbelievable even though I have rolled a paid off car payment into paying it off. I just need to stop spending! On a side note, I relate it to my eating habits too. When I’m stressed, I eat and spend. 

[waverly]

Yeah I keep talking to H and its like I don't say anything- he just can't stop himself from spending. That is why I was thinking of implementing this plan in January/ Feb ish.

1. Black and white contract for H to sign. I had success with a contract previously that he would stop being obsessive with the house and only do "repairs." He has since gone off the wagon again putting in basically a home brewery. Is that worth debt??? He has an OCD part of his personality. Its like he can't stop. The contract will be displayed or frequently referred to. After I made him sign the first one he said he was relieved more relaxed.

2. In the contract he will now be limited to debit card only- me too.

H too spends so much money on food. Its like every meal has to be this perfect wondrous event. Our restaurant budget is huge, and we aren't going to fancy places. Its just nuts at this point. I don't think I will win this one though. Food is like his #1 thing in life.

[k3am]

I use my credit cards religiously. You couldn't pay me to use my debit card regularly. I like the protections my credit cards afford me, and the rewards don't hurt either. But I treat them like debit cards. All cards are paid off on Mondays. If I can afford to pay for something in cash, I can't afford to buy it.

[polecat8]

It's funny that you bring this up welly01. I was just looking over my bank statement for last month and thought that we should have some money to send to savings, but nope. Since DH isn't working anymore, I think it's time for us to build a better budget and finally get those pesky student loans paid off. We don't have a strategy for spending and so we don't know how to limit ourselves, especially since we are down to one income.
So I just reserved a Dave Ramsey book at the library and my intention is to get a grip on our budget and financial goals for the new year.

[katrine05]

Oct 4, 2017 11:24:10 GMT -5 k3am said:

I use my credit cards religiously. You couldn't pay me to use my debit card regularly. I like the protections my credit cards afford me, and the rewards don't hurt either. But I treat them like debit cards. All cards are paid off on Mondays. If I can afford to pay for something in cash, I can't afford to buy it.

This is what I do as well.

[2chatter]

I did it hard core - I only drove once a week other than my commute, no kid activities, basic food, they got baking supplies for Christmas and I bought very little for others. DH was actually just my friend then and he bought the girls birthday presents because he was amazed at what I was doing.

Now I just snowball. Right now its student loans which feels like it takes forever and I talk myself out of the full amount I could pay monthly instead of buckling down. So I am going to modify it. When it drops by half I am going to pull the rest out of savings. Having under 40K in savings will freak me out and make me diligent. But it's a small risk that will quickly resolve, so I think it's worth it.

I feel like it's a mental game - you have to know yourself and trick yourself into buying in. So what motivates you? Maybe do Christmas up as normal but cut something else....

[CrazyLucky]

We did Dave Ramsey. I think we got some things out of it, and some things, we flat out disagree with. And some things might make sense, but not for everyone. We never went to the envelope system. We use one credit card for everything, pay it off every month, and get cash back on it. Using the CC also makes tracking your spending much easier. We did start tracking spending very closely, and budgeting everything. we added up what we had spent previous years on gifts, and made a line item for that. We spend a LOT in gifts! I think the program is really good for people who have a lot of debt, and not so much for people who are doing ok, but want to improve.
The biggest thing I disagreed with him on was not taking student loan debt. I side eye the people with $130k in debt and a non-marketable degree, but I think taking a reasonable amount of debt is vastly greater than wasting a couple of years making little money, and saving it all for college, just so you have no debt when you get out.

We did get financial peace junior, or whatever it's called, and we've used that with our kids. I like that a lot. They have chores they have to do, and then chores they can do if they want to earn a quarter. They do a good job of saving and have bought some nice toys.

[Covergirl82]

We haven't officially done the Dave Ramsey plan, but use the snowball concept. DH gets fairly decent bonuses, and we've been using those to pay down/off debt. Then we take that money and apply it to another loan. (Now if we would stop buying different cars, that would help us get ahead. The goal with our current vehicles is to drive them until our kids start driving. I'm hoping the vehicles hold up to that goal and we hold up to it as well.) I'll be honest, I have hard time with the "live like no one else" concept, because there is no guarantee I'm going to live to retirement to enjoy anything, and I want my kids to enjoy the fruits of my labor (without have to wait 10 years for that to happen). So I tend to spoil my kids, and DH and I drive newer cars, and we go on a nice trip at least every-other year.

I'm with k3am and katrine05 on using credit cards. But you have to have discipline, as they mentioned. We paid for 3 of 4 plane tickets for our trip to Disney last year with points accrued on one of our credit cards. We paid for one day's worth of park tickets at Disney with rewards dollars from our Disney credit card. I feel like that is making our money work for us. And IMO, debit cards are not as safe to use. If someone steals your card number, your money is gone until the bank gets it resolved. With a credit card, fraudulent charges go into dispute, and you're not responsible to pay the charges.

2chatter, I'm in awe of your 40K minimum in savings. And I do agree that it's a mental thing. I have more recently had internal conversations as to whether or not I really need something before I buy it.

[welly01]

twinmomma, I should just give my credit card to DH. It's also a problem because its listed on Amazon. Oops, lol. I guess I just need to commit to seriously putting it away and not using it until it's paid off.

waverly, the parties are usually school parties. They do class parties for Halloween, Thanksgiving and Christmas. They encourage parents to bring an item. Most of the parents also do a little something for Halloween (bag of candy, etc) and most also do a small bag of something at Christmas. There is also a fall festival that is a big fundraiser for the school so they ask people to contribute items for raffle baskets, etc. I guess this year I'm just going to have to tell myself not to participate unless I've made my scheduled payment to the cc.

polecat8, if you start in January, let me know. I'm thinking of taking the Financial Peace University after the holidays.

[sandandsea]

We didn't do Dave Ramsey (we paid off our debt - we only had student loans as we were debt adverse anyway - based on interest rates and still use ccs for points and contributed to retirement while paying off debt ) but I do listen to his podcast almost daily on my commute. I think the most important part is budgeting. Include birthdays and Christmas in the budget.
Every month will have a different budget so you plan ahead for what's different that month (dentist appts, annual exams, bday, anniversaries, etc).

Both parties have to work together and be bought in for it to work. Think about your big goals together and create a path to get you there.

[sandandsea]

A few more things that helped us.

1. All raises and bonuses went directly to paying off the debt. So we kept our lifestyle the same even though our incomes increased.
Dh gets stock options too and we have always ignored that income and saved it. We do not use it to increase our lifestyle.
2. We found cheaper alternatives to fun activities. Instead of an amusement park, we'd go on a hike. Instead of a nice hotel weekend getaway we'd go camping. Instead of a nice steak dinner, we'd get pizza. Etc. we still had fun, but it was mindful spending and we chose less expensive options.
3. We set budgets for special occasions. For Christmas we give one big gift from Santa and then 4 gifts per child (wear read want need). We also draw names now with family and it's sooo much better than having to find 15 meaningful gifts and more affordable. Homemade gifts like cookie mixes and fancy sugar scrubs are great too!
4. Pack lunches and avoid eating out. This is one I still try to do as much as possible. It's healthier and soooooo much cheaper!
5. Buy kid clothes ahead of time. Especially if you're in a moderate climate or kids are older so sizes are predictable. You can buy at end of season blow outs and get amazing deals.
6. See what bills you can lower. Call the cable company, price car and home insurance, check cell phone plans, see if you can do a special electricity meter or some solar panel or other deal.

[sandandsea]

Oh and check out the money matters board on here. They're great at looking at budgets and helping find areas of improvement. . And they're super smart with finances. I was part of the board years ago when we were paying off the debt and it was helpful!

And listen to the DR show. It's totally motivating and inspiring to hear people who make less than you pay off more than your debt. The encouragement is worth a lot!

[welly01]

sandandsea, thanks for the recommendations. I'll definitely start following the Money Matters board.

[waverly]

Oct 4, 2017 11:24:10 GMT -5 k3am said:

I use my credit cards religiously. You couldn't pay me to use my debit card regularly. I like the protections my credit cards afford me, and the rewards don't hurt either. But I treat them like debit cards. All cards are paid off on Mondays. If I can afford to pay for something in cash, I can't afford to buy it.

I wish H felt this way.  I definitely do.  Maybe I need to take over the payments too?  I took over the child care one because he was supposed to pay weekly.  He paid monthly which they allowed because we had been there 6 years, and they always got the money.  But it was embarrassing to me to be like oh H is supposed to pay that- he didn't- I'll let him know since I did most drop offs and pick ups.   And then listen to him complain that they wanted his money and me explain he is supposed to be paying it weekly not monthly which he damn well knows.

He is like those finance professors in Dave's book.  He went to B-school so he thinks he is being smart "using other people's money".  When I point out the interest, he says no one is perfect.  And then he points out the "rewards" we got, which are probably no where near the interest.  

[186momx]

Something we tell our clients who are having problems budgeting money is to track every cent you spend for 2 weeks. Then look at what you are spending money on and how you can cut back and save. The biggest one is coffee! Buying coffee everyday is $25-30 a week per person so we suggest making it at home or drinking the free office coffee. Another big one is eating out, convenience store stops (7-11), and bad habits like smoking.

I will tell you my own H won't do this. He takes out $300 in cash plus uses the credit card and I can't get him to tell me what he buys and why he is always out of cash by the 3rd weekend of the month. When his CC bill gets to being too much I just tell him we are broke and he needs to stop spending money and he does stop charging as much but I have to remind him every couple months as it is never long lived.

I try and start Christmas/b-day (January b-days) shopping early so it isn't all on one bill too.

[k3am]

waverly , I manage 100% of our daily finances. On an occasional basis, I'll transfer funds to our brokerage account, at which point DH manages the investment of it (since I have no time/effort/desire) with guidance from a friend.

ETA: We get great reward and don't pay interest this way. 

[k3am]

Eating out is one place that we could cut back but I refuse. It's $3k a year (estimated @ $50/week for work lunches, plus some wiggle room for overages) that helps keep my sanity. Lunch is often the only time I leave my desk for more than 5-10 minutes...

[traveltheworld]

I did when we were young - used it to pay off student loans. We no longer follow the program as I can't imagine not using credit cards. Neither of us carry any cash and we never use our debit cards. But we pay off our credit cards religiously - it's just an automatic withdraw from our account every month. I keep very close tabs on our money and can usually tell you at any point how much we have in various accounts, so we haven't had a situation where we can't pay off our credit cards yet. Also helps that DH never spends money on anything.

Our biggest non-daily expense is vacations - and I peg that to the amount of bonuses DH and I receive. If we have a good bonus that year, we'll take an international vacation; otherwise, we stay on the continent.

I do feel like we haven't been saying very much ever since DD came along. Nanny + daycare + extracurricular activities = lots of money. But hopefully that'll go down and we'll get back on track once DD starts going to school.

[waverly]

H manages the finances, which I think might be part of the mistake. He wanted to because he had the gendered view of watching his Dad do it, so he thinks it should be the man doing it, I think? I think that is his POV. And not in a sexist way but in a role model way, I guess? I acquiesced because he makes well almost 3 times I do now, so I figure make more spend more- OK. Or manage the money- OK.

But I really don't think he does a good job (parts are OK which is why I have let it go on so long). So it may be in there that he is ousted, as a consequence. Which I am sure he won't like. But doesn't it make sense for the more conservative spender to manage it?

Or it might be that I take over the parts that annoy me first and go from there. i.e- I do the CC and childcare and he does the other bills- management wise. Money wise it is all joint.

Its getting to be such a large task that it might need to be split anyway. So many bills, and now tax stuff, and investments etc etc. Its like running a small business. So maybe I say I pay these bills, and you manage investments.  Might be easier for him to swallow, and he likes revenue better than saving money anyway.  Revenue man- which I don't think makes much sense unless you went to business school too or know about it peripherally.  He is always complaining about companies cutting cost etc.

And we have to do something about the payments because he keeps missing bills each month.  Not in a major way, but in an annoying way.  Any suggestions?  I do Mint- he doesn't like Mint.

He does Money dance- which I don't like since its not web based or at least what he is doing is not.  He has no bill manager with due dates set up....Should I just start adding them to Mint with out joint e-mail address?  He struggles with organization.

[2chatter]

I don't want to know what we spend eating out. 6-8K/year? Between DD's limits and DH's preferences...DS says things like "we can't go to Seasons 52, I'm in sports shorts". It freaks me out from time to time but I try not to think about it.

[welly01]

waverly, I'm not familiar with Money Dance but I do like Mint. I think you have to find a system both of you like. I did Quicken for a number of years but didn't like that I had to keep upgrading. Honestly, if DH is missing bills (even a little), I would have a CTJ money meeting with him and find out why. To me that's unacceptable. You could take over and spin it as he's handled it for x number of years, now you want to handle it for x number of years. I'm a huge believer in both spouses knowing what money is going out the door, level of debt, etc. Also, I use auto-pay for anything I can. That way you're not keeping track of due dates, etc. Our bank sends a nightly email with balance and daily transactions so I know if something unusual hits. I do our monthly expenses in an excel spreadsheet so I can look back at what we've spent on gas, food, etc. DH and I both have individual accounts with play money and personal expenditures and a joint account for family expenditures. That has worked out well.

[sandandsea]

Oct 4, 2017 13:43:25 GMT -5 k3am said:

Eating out is one place that we could cut back but I refuse. It's $3k a year (estimated @ $50/week for work lunches, plus some wiggle room for overages) that helps keep my sanity. Lunch is often the only time I leave my desk for more than 5-10 minutes...

I agree with this, but we are fortunate to be able to afford it. If we had a lot of debt or I needed that $3k to pay for something important, I would cut it out quickly!

[Covergirl82]

Overspending on eating out is a big one for us too... DH and I did agree about 2 months ago that the eating out (combination of lunches and dinners) was getting out of hand. I limit myself to 1 latte and 1 lunch out a week, with a goal of keeping the total of the two to $10-$12. I need to look at the credit card to see if DH has been keeping up his end of the deal as well...

And this thread reminded me that I wanted to set up a separate account for our emergency fund, so now I'm going to talk with DH about that.

Related to what sandandsea mentioned about buying kids' clothes on clearance, I do that, and I take the clothes they've grown out of (if still in good condition) to a consignment place and use the money from that for future clothing purchases. I usually make around $300 a year on clothes I sell via consignment.