Total Money Makeover!

My customized plan for getting out of debt based on “The Total Money Makeover” by Dave Ramsey – because I definitely need one.


After making the rules of my shopping ban and successfully completing (drum role please) 2 days ( hah.) I listened to Dave Ramsey’s “Total Money Makeover” after being encouraged to by two different people. Despite the first 3/4 of the book being Dave rambling about why everyone is stupid for being typical people I’ve finally reached the part where he actually discusses the steps and great news, I already have enough to complete step 1! PLUS I already started step 2 with paying off my cell phone :). I’m going to frequently update this post as I make progress and to keep track of my goals. The only deviation I’m going to make (sorry Dave) is that after transferring 2,500 of my debt to a 0% interest credit card I’m not going to pay that portion off  before hitting the larger balance card. I just can’t do it Dave, sorry. I hope I’ll find the balance between my motivation and what makes sense mathematically to work for me and if not feel free to reach out to me and say I told you so!

Baby Step 1 – $1,000 to start an Emergency Fund

completed  6/22/2018 $1000.00 CASH saved in separate account for emergencies only

Baby Step 2 – Pay off all debt using the Debt Snowball

My debts in order: 
(1) Cell Phone: $507.87 – PAID OFF! 05/27/2018
(2) IPad: $717.36
(3) Credit Card #1 (CC Bank): $2200.55 (@0% APR)
(4) Honda: $11,271.04 (@2.99% APR)
(5) Credit Card #2: (Barclay) $11,432.59 (@26.5% APR)
(6) Student Loans: $19,079.48 (@4.740%)
(7) Consumer Loan: $26,870.90 (@12.790% APR)
(8) Mortgage* $132,810.92 (@4.625% APR) – FOR SALE!

Total Debts: $72,079.79
Consumer related: $53,000.31 aka 73.5% of my debt was completely avoidable and is due to my poor decision making.

*I’m not including my mortgage in total debts because I’m not intending on paying for this home in full. It’s actively for sale and hopefully by the time I’d reach it in my pay off cascade it won’t be mine to pay off!

My plan for my debt snowball is slightly modified. I can’t bring myself to pay off my CC Bank card with 0% interest when I have my Barclay one at almost %27 APR. Also, with my Honda and my Barclay card being only a few hundred dollars apart but with drastically different interest rates I’m going to focus on paying the Barclay card first. The same goes for my student loans and consumer spending loan – my student loan payment is $178 at a lower APR, my loan is %550 at a higher rate – I just have to do it my way for these ones (Sorry Dave). It just makes more financial sense, if I find myself struggling to stay focused/motivated I’ll switch it up. That being said, my personalized debt payment snowball will be as follows:

(1) Cell Phone: $507.87 – PAID OFF! 05/27/2018
(2) IPad: $717.36
(3) Credit Card #2: (Barclay) $11,432.59 (@26.5% APR)
(4) Honda: $11,271.04 (@2.99% APR)
(5) Credit Card #1 (CC Bank): $2200.55 (@0% APR)
(6) Consumer Loan: $26,870.90 (@12.790% APR)
(7) Student Loans: $19,079.48 (@4.740%)
(8) Mortgage* $132,810.92 (@4.625% APR) – FOR SALE!

Baby Step 3 – 3 to 6 months of expenses in savings

With my new per diem job I don’t have a set monthly income or hours – I work as much or as little as I’m willing to put in based on need, but just as an estimate, when I was working full time (at a lower rate) and doing my minimum required hours at my per diem job (my new full-time source of income as of next week) I was pocketing about $6200 a month. If I work the same amount of shifts at my new job, I’d be bringing in about $7740 a month (except this doesn’t take into account the overtime rate I’d be getting for 1-2 shifts weekly). All in all I should have plenty to pay down my debts now that my income should be a few thousand more each month. This savings plan is obviously designed based off of me still having debts/payments. Once my condo sells and my debts are gone I’ll need a completely new plan, but here is this one anyway!

My monthly bills are as follows:
Mortgage (PA): $1140.00
HOA (PA): $240.00
Loan: $550.00
Student Loans: $178.00
Verizon: $215.00
Honda: $378.00
Credit Card (approx.): $450.00
Rent (AZ): $805.00
Utilities (AZ): $220 (varies)
Gym: $30.00

Total: $4206 + approx. $600 for gas and groceries =

Total Monthly Expenses: Approx. $4810

Minimum day shifts required to meet expenses per month: 12
Minimum night shifts required to meet expenses per month: 10


Savings Goals: 
3 months expenses: $14,430
6 months expenses: $28,860

 

Baby Step 4 – Invest 15% of household income into Roth IRAs and pre-tax retirement

 

Baby Step 5 – College funding for children

Whoa now. Not gonna think about this one until I have the other ones underway.

 

Baby Step 6 – Pay off home early

Hopefully I won’t have my home by the time I get to this step and I can just make a wise purchase decision down the road.

Baby Step 7 – Build wealth and give!

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