So I am looking into starting Dave Ramsey's Total Debt Challange. Long story short I am a SAHM of 3 ages 5 and under, with no craftiness to earn extra money. My DH works 6 days a week just to allow us to pay our bills. This year we have had a lot of unexpected medical bills that have eaten all our savings and then some (we didn't have much to start). I homeschool, and with the cost of daycare there is no way I can go work full time. I am going to start looking for a PT evening/weekend job, but I need something that is not seasonal.
Anyways, we are starting to set $50 a pay period into a special hard to get to, but not impossible to get to savings acct for our $1000 emergancy fund. We are well over 300K in debt including the house. How long do you think it will take to get it down to 100K, which is just the house basically? Ballpark ideas are fine, I know everyone's time is different.
Step One: $1,000.00 to start Emergency Fund
- We are starting this with $50/paycheck with our next pay period in an account seperate from our supr easy to transfer from savings that also gets $50/pay period.
Step Two: Pay off all debt using the Debt Snowball (Except the house)
- 13,900 in Credit Card Debit
- 6,000.00 401K Loan (This is taking payments directly out of my husbands paycheck and will be paid off in 1 year with out us doing anything extra. We don't mind putting it after our car in the snowball since we don't even notice the payments.)
- 10,000.00 Motorcycle loan
- 38,000.00 Car Loan
- 55,000.00 HELOC
- 65,000.00 Student Loans (in deferment, and will most likely defer for 2 more years to get the rest of the debt gone, or mostly gone)
Step Three: 3-6 months expenses in savings
Step Four: Invest 15% of household income in Roth IRA's and pre-tax retirement
- We currently put 6% in automatically, the company matches. As soon as we are debt free (except the house) we will go up to 15%
Step Five: College Funding
- We have 3 kids. The oldest is 5. We need to get started on saving soon, but I don’t want to pay for all of my children’s education. They have to learn how to budget and plan themselves. I don’t think student loans are evil, the outcome is often well worth the debt.
Step Six: Pay off home early
Looking forward to it! Hoping to be there within 10 years.
Step Seven: Build Wealth & Give (Mutual Funds / Real Estate / Charity)