The simple math is that you have to spend less money! You MUST spend less than you earn. You can buy less by borrowing stuff instead of blowing money on it using sites like freeborrow or you can just do without until your finances get back on track.

juanita September 08 2010 12:10 PM

I am a single female.....one day I found myself with 19k in credit card debt (not including my mortage) and that day I said nope not any more. so I changed my lifestyle 100%. I cut up all my credit cards and starting paying them off from smallest to biggest. I also started looking for a roommate and found one with in a week. (: that was a God thing! I am still in debt and still have a ways to go....but I am a single female who makes about 24k a year at work and I have been able to pay in just about 6 months $7000....its now closer to 11k that I ow and is only going down. its hard work but so worth it.....I know 12k is still a lot but in about 14 months I will have no credit card debt. getting out of it is about looking at your spending lifestyle and changing it 110%.....when i started i was desperate but now its at least under control! its amazing the Blessings that God has given to me along the way.....also riding my biks saves lots of $! you guys can do it too....as i said i have no husband and have paid 7k....i just under 6 months.....! thats a good chunk of $! (: I hope I have encourged someone (: !

katie September 03 2010 9:35 PM

I have been doing this for about 4 months now, and have eliminated 3 of 9 debts totally and it feels great. If you are able to pay more down (I am fortunate and have a part time job) the debt will disappear even faster. Barring any emergencies I will be debt free except my mortgage by Dec 2011.

Chris September 03 2010 10:49 AM

This is actually quite brilliant. I have looked at many other plans which go with the notion that you should pay off the highest interest first. Although this might work for Mr. Spock few people can approach things on a completely logical basis. By experiencing success early on this concept integrates a psychological approach to the system. I will definitely give it a try.

Doug August 28 2010 11:44 PM

TO: BrokeStudentInSeriousHelp. Try calling the CC company and explain your situation, and ask them to work with you on a payment plan. The last thing they want is for you to not pay them at all. I once was in trouble with my CC and they lowered the payment plus the interest for a period of 12 months. With that being done I was able to pay a significant amount to lower that debt. Also have you tried selling furniture or what ever you can to help lessen the debt? Whatever the situation is don't give up.

Linda August 27 2010 3:14 PM

i am a commission based employee which means i have some good months of income and some months that barely pay the bills. my wife and i are on step 2 and are wondering how aggressive i should be on paying some of my debt off. for example, i have 6k remaining on my car loan and if i were to have 1200 left over this month to put on the car, should i put all of it on the note? or should i put 600 on the car and save the remaining in case of a slow month? i want to get out of dept as quickly as possible, but also want to make sure that i have enough cash remaining to pay household expenses. Any Ideas???

Don August 24 2010 7:08 PM

So I have been through the FPU and I am trying SO hard to get all of my debt paid off. I bring home around $22K (that is after taxes). I am in the process of finishing up my BA in which was all paid for with student loans. By the time I graduate I am looking at $75k in student loan debt. Right now I have right around $13k in CC debt. I have a car payment of $230/month. I did the whole same as cash thing for my furniture and have yet to pay a dime on that, so I know I owe more than what its worth. I am at a point right now where I can't even make the min. payment on one of my credit cards (Balance of $9k). I pay half of the min. payment, but I know that looks bad to the CC company. Any ideas as to what do do about this CC situation? I have applied to a number of places for a part-time job and have had no luck. Has anyone ever contacted the CC company to ask for a lower payment? I'm not sure how all of this works. Any help would be great!

BrokeStudentInNeedOfSeriousHelp August 22 2010 4:57 PM

Follow Dave's advice. My husband and I can testify that it works. Almost debt-free. Including the mortgage!

Teresa August 22 2010 12:55 PM

Financial freedom WILL change your life: 1. Work b/c you WANT to work. You get to choose passionate work and it will show, thus, people will want to do business with you. 2. No financial stress keeps you from blowing up at your spouse 3. Stress related health problems diminish 4. Working to accomplish financial freedom gives you pride and peace of mind. If you know how to accomplish it, you are truly wealthy. Like Mr. Ramsey says, one little success makes you feel good, which creates another success. To paraphrase Mr. Ramsey, "We don't do things because of logic, or else we wouldn't be in debt."

Charlie at GainFinancialFreedom.org August 14 2010 8:39 PM

Judy I know how you feel, it seems almost hopeless, at least at first. Have you called everyone of your creditors to ask them to close your accounts and lower your payments? Or register online on their websites, and sometimes THEY will have a place there for you to let them know you need to make payment arrangements for a period of time. That could give a little breathing room to start with that smallest debt to get it paid off. It has to start somewhere, hon. We are doing it, slowly but surely, and it's hard, but it is working.

carole August 11 2010 6:17 PM

I feel like my husband and I are a lost cause. We've got stupid tax comin' out of our ears! We are stretched so tight every month that we find ourselves skimping on groceries (not easy to do with two teenage boys!) to pay the many credit cards and stupid idiotic car payments every month!! I keep saying I want to buy Dave's book but my husband thinks that everybody else's situation is different from ours and it wouldn't work for us. We don't have any extra money to do the snowball etc etc. We already make the minimum payments on all of them! I don't want to go bankrupt and I'm so afraid that we will end up there! So far we're still miraculously current. And we rent, so no mortgage to worry about. :(

Judy August 09 2010 7:25 PM

I have been reading the comments, and a person posted in December 2009 that the billpayregistry.com was great - I read their FAQs and found out that they charge a payer 5.9% to provide money (via credit card, which I find ironical and which Dave R. would find illogical given his pro-plastectomy bias) to someone's debts! Thus, avoid this "service", in my opinion. Cheers!

wyrd (pseudonym) August 05 2010 7:17 PM

To those of you who are discouraged, don't give up hope. My husband and I read Dave's book in July 2006. At that time we were almost $100,000 in debt (incuding our mortgage, which at the time was about $49,000). My husband was hiding his financial problems from me and brought Dave's book home out of desperation. I read it that night, all the way through. After I closed the book I told my husband to go get all his credit cards. I got all mine, and we cut them up, cold turkey. We then started Dave's Debt Snowball program. Since then we've had to shoulder other financial concerns; we owed money on our taxes two years in a row, I was out of work for all of 2008. But we NEVER LOST FOCUS. Since 2006, we've paid all personal debts to relatives, we've paid off the IRS, we paid off hubby's car and several credit cards. I just paid off a major credit card that's been a monkey on my back for years. We aren't debt free yet, but we've retired almost 50,000 in debt in four years. We've had garage sales, take a calculator to the grocery store, and pack our lunches several days a week. We cook at home and go out to dinner when we pay off a credit card. We pay cash for EVERYTHING. Please don't despair. Relax, look at your challenge, and meet it head on. And don't look back. Look forward and be determined. DAVE'S PROGRAM WORKS.

Kat August 03 2010 6:46 PM

Am trying to help a friend in debt. She is behind on CC payments, wants to call the companies and try to negotiate at 25 cents on the dollar. She is unemployed and gets by on what she can scrape together doing odd jobs, lost her job last October. She has money from her tax refund that she will use to repay. Anyway, my question is, what is it that Dave says to do when calling the CC companies? I am always in the car and cannot write it down, want to be sure I give the correct advice. I know it is something about making sure to get it in writing and a cashier's check. Any help is appreciated.

Helpful Friend August 03 2010 6:30 PM

I read both his books and finished baby step #1, started baby step #2 and paid off my first credit card. It had a balance of only $580 but the feeling of paying it off was priceless. I'm pumped and now am working on my second smallest credit card. Its a looooong road ahead, but its well worth it. I don't want to retire and eat Alpo after working 40 years in education. Nope! I want to travel!! Italy, Costa Rica, Paris, here I come...don't cry for me Argentina...I'll be there too. But first, got some paying off to do!!

Nancy C July 31 2010 10:44 PM

My hubby and I are so tired of living wk to wk. We don't know where to start w a budget. How do u budget when every wk you pay out what comes in? We have a wonderful marriage, but this money thing is horrible!!!

dmc July 31 2010 9:20 PM

To everybody with medical debts: If you owe large amounts of money to several different doctors or facilities, I have some tips and suggestions to get on top of your debts. First, they won't even consider giving you a minimum payment or for financial assistance if you have cable, jet skis, atvs, etc. Be honest. Sell that stuff, pay your debt. Second, apply for financial assistance or discounts. If you are uninsured, try to negotiate. They have to negotiate rates w/ health insurances all the time. A lot of times they will offer discounts for "cash" pay patients like they would negotiate a rate with insurances. Third, make payments on each debt each month, keep track of the representatives you speak to & which doctors they work for, and keep receipts and all bills. Sometimes hospitals and doctors lose track of payments. My suggestion is to always pay with debit card or check- these are traceable. Cash is too easy for dishonest office staff to pocket, and money orders can get lost. Finally, if you fall behind and can't make a payment, CALL THEM. They will be more willing to give you a grace period if you have been regular with monthly payments and if you stay in contact with them. If you don't contact them, they only see that you have been delinquent on a payment and you could end up in collections. Medical debt can be a huge burden, but it becomes ten times worse when you ignore your bills. Get organized and good luck!

Gretchyn05 July 30 2010 3:06 PM

I've read both Total Money Makeover and Financial Peace, LOVE both books. I'm still on baby step#1 but my future is looking so much better knowing that I can do anything. Thank You Dave for helping me realize that.

TANYA July 26 2010 11:39 AM

I've read the book (excellent)I have baby step #1 complete and now working on the debt snowball. I'd love to see someone's example of the snowball spreadsheet. Can't find anything on line.

Gregg Leland July 11 2010 8:40 AM

I'm a recently divorced single mom of 3 teenagers. After the divorce, I racked up quite a bit of credit card debt. I recently bought a house and got a 6500 house tax credit. I'm keeping back 2000 for savings to help throughout the year. I can't decide what credit card to put the extra 4000 on. I have 1 card with 20& interest and a balance of 7,800. the next highest is a card with 0 % until 11-10 and a balance of 3800. there are 4 smaller ones with 1000 each which are all 0% until 9-10 and 3-10. Which would be the best place to put the 4,000?

Cheryl July 09 2010 6:46 PM

My wife and I are debt free!!! God bless you Dave Ramsey. Follow the steps he's laid out. You'll get there.

Lee July 08 2010 3:20 PM

Trying to decide how to get started with the dept snowball. First of all, my current income is 6000mo., my savings is 28500. Should i use part of my savings to pay off a couple of credit cards. I owe about 58000 in credit card dept. Not to mention morgage and 2 car payments. Help me get started.

Mark July 08 2010 11:37 AM

Not including our home and cars, however we are behind, we have maybe $20,000 including cc debt and signature loans. I understand what to do but I'm scared of losing our transportation and home. We can barely put food on the table and keep the utilities on. MY husband is working all the overtime he can. I have looked for part time employment with no luck. Is a second mort. the answer? We make about $50,000

Marsha July 08 2010 10:06 AM

How do you pay off old debts (accounts tht were charged-off or labled "collections"? I don't get any bills but they show up on credit report. Once paid do they report updated info to credit bureaus?

KC July 07 2010 6:18 PM

Tried this multiple times...why won't it work for me??

Chris July 06 2010 11:56 PM

Jennifer, you asked for some ideas most of these are straight out of DR's book "The Total Money Makeover". First of all tailor back the 401(k) contribution instead put that money in an "emergency fund". I personally wouldnt pay anyone to "monitor credit" with DR's system you eliminate credit cards and its debt. Perhaps you can take this money and use it somewhere more beneficial to you? Organize your bills per month from highest to lowest (include all your monthly expenses) versus how much income you bring in. Hopefully this should help you start a "rough" budget. Step 2 would be organize your debts (CC, medical, student loans) smallest to largest and start paying them down largest to smallest (with money that you have left over after covering all monthly expenses). It may sound like a lot but with some prayer and a positive attitude it can be done. Hope this helps a little, Good luck and God Bless!

RSA June 30 2010 10:18 PM

OK- So I am here because I also have a TON of debt. I owe about 80K in student loans, 1K in CC debt, 5K in medical bills and last year decide to BUY a trailer house to get rid of rent, it will be paid off in 3 more years. I figured after I paid it off this would leave me more room to pay MORE debt. I am a single mom of two with NO assistance (I say this because people tend to think that single parents get state aid...NOT true, always) I do have a 401K and put about 50/month in it. I just was wondering if anyone had tips on a "budget" or something.... as one of my biggest problems is organization (of bills)....oh and I am paying a place that is supposed to help monitor my credit and straighten out creditors STILL reporting from FOREVER ago... Any ideas Please!!! :)

Jennifer June 28 2010 8:28 PM

@Jenn, WOW that is a lot of money to worry about! Student Debt is terrible, do our education fees really need to be that extravagant?? Being in debt is awful and living paycheck to paycheck must feel very unsettling there are a few things you can do to tackle these huge numbers: 1)I really think you need to set up a savings and/or emergency fund. Although most (if not all) of your salary is going to paying off various debts, you definitely need to be putting part of your paycheck into savings so you have something to fall back on. Especially if you have kids, something could happen, and you need that security. 2) Avoid growing your debt - get rid of the credit cards! They just make things worse! You can still pay for things online using a debit card which allows you to spend money you actually own. 3) Set up a budget. This is key for getting out of debt, saving money, and making sure you have enough to live on. Best of luck to you and your family! And stick with it, don't get disheartened, you will make it!

Alicia June 09 2010 12:23 AM

@Cady, the emergency fund is just that, money put aside for an emergency and usually these emergencies are unexpected. Although you and your husband both have stable jobs, you never know if or when this situation could change so it is always best to be prepared. Ideally, your emergency fund should be able to cover 6 months of living expenses. Perhaps consider transferring 10% of your paycheck (every time you get paid) into your emergency fund until you have that 6 months target. With both you and your husband contributing to that fund, it will quickly fill up!

Alicia Ingruber June 09 2010 12:12 AM

this is probably a stupid question, but if i have enough money in savings to pay most of my debt off, Dave would reccomend i do that and only keep $1000 back for the emergency fund right? Both my husband and I have stable jobs..

cady June 07 2010 1:16 PM

My husband has a PhD and 100k student loans, I am working on a MS degree and have approx 50k student loans from my BS degree. We have a small amount of CC debt, a car payment and mobile home loan, we have 3 kids and about 4k in medical bills from unexpected surgery. We both work but live paycheck to paycheck, what can we do?

Jenn June 07 2010 11:52 AM

Todd, If you can sell the car for as much as you can and get of the loan. Not sure what your other auto needs are but whatever you decide to do. Do not finance another car. Pay cash for a clunker and drive it for a year or two. Just a thought and God bless.

RSA June 03 2010 2:51 PM

We are so frustrated with creditor calls! After 1 year of unemployment and now working for 1/2 the amount we used to make we can't find extra money to pay the debt incurred in out snowball effect! We've lost our house to a quick sale, moved to a different state for work and have debt of about $15,000 - what should we do? One credit card, a timeshare, cell phone, and doc bills want their money now! Please help!

Becca June 03 2010 9:59 AM

You state to not use debt consolidation companies, however, I have 4 children and 68K in unsecured debt. I have talked to lawyers about bankruptcy and people about debt consolidation. I cannot see myself getting out of this. What are your other suggestions? I am drowing.

Sarah June 03 2010 7:28 AM

I owe nearly $17,000 on a 2005 Kia Sorento with very high interest and monthly payments of $456. I pay $850 a month for rent due to recently doing a short sell on our high monthly payment home. Or income is limetedand medical expences extensive. What is the best way to get out from under the debt of this car? Please help me!

Todd E. Legg June 02 2010 10:17 PM

Dave, I have about $30,000 in debt, all cc. I have gotten the APR lowered on all of them, have payment plans on them, paying the min since that is all I can do. I am curious if I should call them and tell them that I can't pay them anymore except for the one with the lowest balance so I get them paid off faster. I make next to nothing, $21,000 a year, take home. My husband is right there with me but he doesn't make enough either. We have cut back on everything we can. Any advice. Thanks!

mary June 01 2010 2:49 PM

Helping someone go through FPU. Got the student loan current. Everything is at least 2 years old and in collections -- medical, stores, and pay day loans. Someone just said they thought they heard Dave say get the pay day loans taken care of -- don't ignore them because they continue to grow. Start paying with smallest to largest amount or do we treat pay day loans differently? Did I mention I HATE PAY DAY LOANS?!

Jo May 29 2010 12:36 PM

Dave in Florida I have $75,000 in cc debt which is about 80% for our small business. Since the economy has hit our luxury businees hard in the last two years we are contemplating to go Bankrupt. The reason why is that the 3 plus commercial lease we have at $3400.00 a month couldn't go away without it. ANY OTHER SUGGESTIONS HELP!

Dave May 27 2010 5:37 PM

We have two debts. One is a loan against a life insurance policy that my husband took out years ago. The other is our car loan. The life insurance debt is the smaller of the two, (8K) but the worst that can happen if he doesn't pay it off is that his policy would terminate. He took the loan out long before we were married, and it's been accruing interest ever since. I'm not sure he ever intended to pay it off, but he probably wouldn't mind if I did. The other is just a straightforward auto loan. (18K) WWYD?

CB May 17 2010 12:00 PM

hi,i took the fanical peace university course at church in 2006..i was working on my snowball and Jan 2007 my husband and my son got deployed togeather to afganistand for 18 ,months..at frist i was doing good with my check and his then i went out of work to have surgery on both my legs.i was suppost to be out of work 3 weeks total (Aug 2007) i never went back i ended up having 7 surgeries on my legs leaving me with more medical promblems then before,i can not walk or stand longer than 7 mins. so, my job i had decided that i could not do my job they put me out i was a DOD worker for 14 yrs.now i went without a check for 2 yrs.i now get social secuirty and a small medical retirment check from work i bring in alot less then i made but,i am thankful for it...my husband and son returned to there regular jobs (there national guard)so my husbands pay check has gone to half..we have 8 people in our house 2kids 3grandkids and theres never enought money i find myself buying food and gas on my credit cards we owe appox 32,000. on credit cards and another 15,000 on car payments plus our house payment we are not behind on anything theres just nothing left over our intake a month is 3500. and our bills are 3300. i am so stressed i worry when we owe the dr. money and it seems like thats all i do is go to one dr. to another,any advice would be welcomed..i feel like i left my family down

Debbie May 11 2010 6:43 PM

Single Mom in FL. I am in the same situation. I was told by the loan officier that it does no good to pay off your debt that you have in collection. I was told to pay down my credit card balances, try to get some late payment removed 9so far no luck with tht), in the mean time I will try to stay current on my bills. I will pay 10% of the balnce each month until paid off. For example, i owe $700 on a department store card, I will pay $70 for May, which should give me a $630 balance for next month, I'll pay another 10% ($63) on the balance until it is paid down to at least 30% of my credit limit.

Frugalosity May 10 2010 7:13 PM

Single Mom in Fl: No!!! Do not get anykind of credit care at all. Read thoroughly through the Dave Ramsey sight. Credit Cards are the problem, not the solution. Do everything you can with MONEY THAT YOU HAVE NOT MONEY YOU DO NOT HAVE. That is the whole premise of DR to fix the Debt problem not make it worse. Dave would suggest paying off ALL debts before a house is even in the picture. The sensible plan although it may not be what you want to hear (straight out of his book "The Total Money Makeover")would be pay off all debts with an Emergency Fund of 3-6 months then save up enough money to put down for a fifteen Year fixed mortage or better yet Dave's plan of 100% down. Hope this helps and God Bless!

RSA May 10 2010 3:24 PM

I need help. I want to buy a home but because of past mistakes my credit is really bad. I have a score of 529. I am thinking paying all the debts that show up on my credit report using the snowball plan so at least they show as PAID and not just as debt. Since I have no open accounts at all, I was thinking of getting a secured credit card and hopefully that would bring my credit score up. Do you think this is a good way of fixing my credit? Thanks

Single mom in FL May 09 2010 7:46 PM

Help for those who struggle. I took this advice straight from the bible and it worked. Nothing is a strong as a three braided cord. Consider teaming up with two other people to house share. Splitting expenses three ways has helped me get out of debt,save and afford living in a nicer place. However you must be able to work out differences and negotiate the rules which everyone lives by. I would definitely recommend this option for those on social security or college students. It is so much cheaper.

jan May 06 2010 10:27 PM

Dorothy – Since you have been attending FPU, I’m assuming that you have developed at least the Quickie Budget. Identify any areas in the budget that can be cut (cable, eating out, land lines, etc) and make those adjustments. Next, make a list of things in your house that you have not used in a while and either sell it on eBay/Amazon/Craigslist or hold a yard sale. With your next paycheck, pay yourself first by transferring some money to savings. This savings will eventually become your emergency fund (Baby Step 1). Even if you can only put 1 or 2% of your paycheck to savings, do it. Saving from now on needs to be treated as a bill. As you get more breathing room in your budget, increase this savings percentage. Use cash for everything that you can. Good luck to you and God Bless!

Evan H. May 04 2010 1:54 PM

Dennis – What is the reason for not paying taxes and debts for the last few years? Are you out of work or not able to work? Your first priority is to run the numbers on your taxes and determine how much you owe or will be receiving back. The interest and penalties will really eat into your return, if any, though. The IRS has the ability to garnish wages so this could be a real possibility. For the other debts, it depends on whether they have gone into litigation or if they can be written off. If they have gone into litigation, they can garnish your wages if ordered by the court. Come up with a budget that places maximum priority toward paying the tax bills first then your debts by a debt snowball. Good luck to you and God Bless!

Evan H. May 04 2010 1:40 PM

i have never been so excited about packing my lunch everyday! now to get creative with beans and rice!

B May 04 2010 12:01 PM

I have been applying the snowball plan to my credit cards. Since I am making minimum payments on all my cards except for the one at the top of the list to pay off first, I am getting letters from my credit cards, recommending debt counseling since I am paying min. pmts. Also, I got one letter from Citicard saying they are closing my account, which I don't care, but why the hassle from them? I'm never late, never behind. Any ideas?

Sue May 02 2010 7:54 AM

We gave $20,000 owing in a home equity line of credit with high credit and then had to buy a new transmission for our car and we can never seem to pay it off. It also has a high interest rate. Is there any hope for us? It seems like after raising so many kids, college, etc. we should be getting to retire, but I feel that day will never come. Where should we start?

Sandy April 28 2010 5:26 PM

I am about to enroll in the Air Force however it seems they do a credit check on my application. Currently I have just under 20K in debt, with 2 credit cards and 1 repossession. Ive been thinking about using a debt consolidation company to change the status about these accounts from adverse to satisfactory on my credit report. However, I just read about your recommendations about debt consolidation companies. What would be the best advice in dealing with these outstanding accounts so that they would not effect my application into the Air Force?

andrew April 27 2010 8:10 AM

My husband and I HAVE ABOUT $40,000 IN CREDIT CARD DEBT. Since we have been barely able to make the minimum payments and have recently fallen about 2 weeks behind now adding late fees to our balances, I recently got an additional part-time job that will net about $1,000 extra each month. We will probably need $500/mo to stay current with bills which would leave about $500 extra to pay on debt. Do we need to attempt to get out of debt by ourselves or are we too far in debt?

Brandy April 26 2010 11:10 PM

my husband and i are attending your classes but can not seem to get ahead. my bank account is in the red and i borrow here and there from family and friends just to get by each payday but by next payday i have to repay each of them. any suggestions on how to get ahead

Dorothy April 23 2010 11:00 AM

My husband and I were making huge payments on our debt every month. Since November we have paid $7800 in car repairs. We own all 3 of our older model cars, but these repairs are killing us. We have to keep 3 cars in case one breaks down so we can get to work and school. Dave says not to buy a new car, and I doubt if we could get a loan for one anyway, but we can't make serious progress on our debt when our used cars break down all the time. Our plan was to be out of debt by next April. Also, the interest rates on all of our cards have gone up to almost 25% simply because of the legislation that was passed. We have drastically changed the way we live, but it seems like we still can't get ahead. Any ideas?

Sally April 22 2010 10:54 AM

I have about 50k in debt. i havent paid taxes in 3 years and havent paid any debt for years. All my debts are in collections. Where, when and how do I start getting out of debt?

Dennis April 19 2010 11:53 PM

My husband and I filed bankruptcy 7 years ago. It wasn't over credit cards, it was over car loans and a huge loan that we used our land as collateral. Since then we have both gone to college to get a degree so that we would make enough money. Now that the job market is in a slump, having a college education doesn't seem worth it. We have over 80K in student loans and only make 21K a year for a family of 5. we don't get any assistance because of what money we do get is too much to qualify. We are currently living with a friend because our rent was too much to handle with the payday loans I have. We have decided to move into a smaller place with a rent we can afford until we can save up. We are going to try Dave's plan. I know it will be hard, but we have nothing else to lose.

collegemom3 April 18 2010 12:28 PM

I recently remarried, he has over $40K debt in school loans (half of which is interest over 15 yrs with no payments) he is self employed and still owes some tax on 07, all of 08 and as of today after filing married, another 5K. He works hard, we both have full household bills but are dwendling them down.....my question is how do we ever get the $55k paid off and put away enough to have quarterly taxes paid so we don't have a 5k balance due next year. Advice is welcomed. Be nice.....please.

Cindy April 15 2010 9:04 PM

I bought daves book while staying with my mom while she was recovering from a surgery in a hospital. I needed something to do and they had a copy of his book in the gift shop so I bought it. After I read I thought to myself can it be that easy1 I have been on his plan for about one month. So far I have erased 1700 in debts have about 1000 in small debts left and then we move on too the car and then the mortgage. If I stick with it the car can be paid in a little over a year, and my big mortgage in 6 years. I am pumped. I look at some of my co-workers when they retire, they can't because of debt... I don't want to be that persone EVER!

James April 14 2010 8:33 AM

Finally got serious about paying off debt after Christmas. We've paid off 10 smallish debts (store cards, medical bills, personal loan) totaling $2500 so far. Sadly, we have about $22,000 more to go for the credit cards alone. Then there is a car, mortgage and massive student loans. Our first focus is to get rid of the credit cards, though. They are just eating away at our monthly budget. The other bills will be relatively easy to tackle when the cc's are gone. We have a $1,000 tax refund coming that going directly to debt repayment. We've also cut way back on our monthly expenses. We're doing fine and making progress, but when I see the huge list of cc balances we have yet to pay off, it can get overwhelming. Best to focus on one month at a time I guess. We do make a point of writing each pay-off on a note pad on our fridge. It helps to see what we've accomplished, even if it's still small compared to what's left. Best of luck to everyone.

Amy April 13 2010 12:15 AM

I have been trying to get my husband to save money in an emergency fund for years. Last month, he finally caved. We have $1050 in our emergency fund now and we have been selling anything not nailed down to pay off our debts (old coins, stocks, collectibles etc.). So far, in the last 6 weeks, we have raised $10675 that all went straight to our debts. We have paid off 1 credit card, a line of credit, and paid half of our balance on our other credit card. We are doing whatever it takes to become debt free. We expect to be able to pay the last $3500 on our credit card within the next 2 weeks. And then we are going to obliterate our car loan. Hope to have it paid off by the end of the year. I am so happy my husband has finally agreed to do what it takes to pay off our bills (most of the coin collection is his). The only problem is, I think he thinks we are going to go out and get a new truck for him along with a loan to do that once my car is paid off. How do I convince him this is a horrible idea. His truck runs great but he has never owned a truck for this long (8 years) let alone paid one off. We paid it off 5 years ago.

Stacy April 12 2010 2:15 AM

I have a $150K variable Heloc presently at 2.5% interest only and fear inflation. Should I pay it off? It would take all my savings to do so.

Marilyn Renneisen April 11 2010 12:42 PM

I am serious and want to get started but have a huge task ahead of me - I can do it and with the kit that I had bought, yes, two years ago. My question is - I notice that you state not to worry about interest rates and make the minimum payments until the first debt is paid and then use that money to pay on the second debt, etc. but the minimum payment will not even cover the late fees and interest fees builing on my one credit card balance of $14,000 - what do I do

Victoria Levanduski April 07 2010 9:09 AM

Well I lost my job but I've still managed to get outstanding debt down to $4500. I was calling debt consolidation companies at first and what a rip off and some were just plain crooks. I had one company tell me that they have lawyers on staff and if I paid $450 up front and $150 a month for 3 months the lawyers would fight to get past debts wiped off credit.. I had to stress this is actually my debt, there isn't anything on my credit report that is wrong. They just wouldn't give up. So I decided to take action on my own. I only had $1500 to use for debt because of my job loss so I used it to deal with my smaller debts first. We also paid off one of our cars 2 months earlier. We still have a $400 car payment but at least one is gone. As soon as we both find new jobs were going at our debt like were at war. No more ignoring the problem and feeling sorry for ourselves. To top it off I'm 43 and never bought a house... Thank God! if I was in this situation right now with a mortgage we would probably lose everything. We'll be back and we'll be debt free mark my word! Thanks D.R. Freedom is on its way!

Gary April 03 2010 4:24 AM

A year ago, before I listened to DR, I consolidated my debt by using a HELOC. My total debt is $40,000. $20,000 represents a remodeling job on our house. $10,000 was a car purchase. The other $10,000 is just misc. How do I break down this debt? Could the $20,000 for the remodeling work go in to BS6 ?

Rick March 29 2010 1:24 PM

I am 51 years young and started my $32,000 debt pay off 18 months ago. I have a year left. Living in high economy San Diego sure makes it hard. Dave is SO right when he says "fierce intensity" is required. When I feel a little shaky, I come to this website or watch his show and get my courage back. I also get strength from watching friends and co-workers live miserably because of financial problems. I try to drag them into my journey, but they think the restrictive way I'm living is nuts! Can you believe it?! I honestly believe that DEBT FREE living is what's going to save this country.

Christine March 27 2010 8:20 PM

dont stop investing in your 401K and definately do NOT take out a loan against it. if you can double your minimum credit card payments and chunk any and all extra money on them u can ie... tax return ect.. good luck im a debt free single mom of two!! you can do this!!

Tawana D. March 20 2010 4:00 PM

To Egsa, Dave's plan would say to stop contributing to your 401k and focus on attacking your debt. It's not about the math, it's about psychology. Study the baby steps, read Total Money Makeover, and get your plan together to get out of debt. Then you will have more money each month to put towards your savings and retirement.

Betty March 19 2010 9:17 PM

I want to pay off credit card debt. Should I stop paying into my 401 which is matched at 8% or take a loan out against my 401?

Egsa March 16 2010 10:20 AM

If debt is not good for the Christian, then debt is not good for the church. Is that correct? The devil is in control of this world system, so debt enslaves us to the world and therefore a case could be made that it enslaves us to him.

Bruce March 14 2010 9:25 PM

Hi Mr. Dave I am Shah, I am 26 years old, living in Austin, Tx. I am a full time student and and work fulltime. I earn $1400 a month and I have about $6500 debt on my credit cards, total I have 3 credit cards. I didn't had job for about 6 months and thats why I am so behind on my credit card payment, can you please tell me what is that fastest way to get out of debt, I live with my family, here is what I pay every month $500 on all of my credit card bills every month. $100 Car Ins: $80.00 cellphone bill, $100.00 car gass every month. and $200 on grocery bills. My car is already paid off. Can you please tell me what is the best way to manage my personal finance and how do I have get out off debt quickly.

Shah March 14 2010 9:19 PM

Before my husband and I got married he had terrible credit, mine was good. We started calling about his debts that we had not been payed off, and made arrangements to pay for them. We were finally able to pay it off. However, after we got married we accumulated over $5,000.00 in credit card debt and I had a car payment of $450.00 a month, we also needed another vehicle and added another $2,400.00 to that. We are currently staying with my parents who have helped us tremendously, but we have a 16 month old and we need our own place. We have refinanced our car and were able to pay that off and about 3/4 of our credit cards. The loan was for $11,000.00 and $480.00 is beign taken out of my check every month. My husband was recently laid-off from his job and doesn't know when he will be called back. I get paid monthly and even though we have paid many things off we still don't seem to have enough. Also my sons insurance went through the roof because he is over 1 and because my husband and I make to much money he doesn't qualify for state assistanc(medicaide). I am also starting school and and will need to apply for student loans (something else to add to the pile). I need advise on what to do. I don't want to put school aside any longer, because I know that with that degree I will be able to get a raise in pay. Please Help!

M. Richardson March 10 2010 8:45 AM

This is just a note to say thank you to Dave Ramsey for changing the way I handle finances. After reading his book the Total Money Makeover a few months ago my wife and I have made great strides in getting our finances in order. Just today I cancelled the last of our cards (had to wait to pay it off first). Took some money from our tax return and paid off our vehicle early. We have no credit cards anymore and no car payments. We have one home equity line of credit loan and our mortgage. If everything works out we will have the line of credit loan paid off by the summer of 2011 then just have our mortgage to deal with. All of this with raising four children on one income. Thank you Dave Ramsey I am definetly counting down the day when I can say "We are debt free!!"

RSA March 09 2010 11:13 PM

I was foolishly involved in a ponzi scheme my lawyer stole 400,000 dollars and now we are left making payments on our home we have no credit card debt or debit cards we are faithful tihe payers to our church. Is there any hope ? We are now living from day to day. We do not spend extra no movies no vacations no diners out. This is beyond overwhelming. I hope those that are reading this do not ever fall into this type of trap. Please keep my family in your prayers

George March 09 2010 8:55 PM

My wife and I just consolidated our debt using a HELOC. We owe about $40,000 @ 3.25% We also have $20,000 in a money market account @ 1.25% This represents 6 months of expenses. If I understand DR's philosophy correctly, we should take $19,000 and pay down our debt. We're not feeling comfortable with this concept due to economic conditions. Any advice?

Richard March 09 2010 2:19 PM

The snowball may be smaller in the beginning, but I'm fortunate that my wife is supportive of the financial plan that we've worked out together.

Financial Solutions March 09 2010 8:11 AM

My daughter's husband is a huge Dave Ramsey fan. They are paying down debts and doing nicely. They now are debt free on two vehicles. I believe what is left is a $35,000 student loan at 2.75% interest and the mortgage. They are now planning to pay down the student loan which makes no sense to me. What is the logic in paying down a 2.75% loan? I would think there are much better things to do with extra money.

Rich March 04 2010 12:54 PM

My husband and I are looking for advise. We currently own a home with a huge interest rate, and sometimes have trouble making the payments. We have adjusted our spending but still arent seeing too much of a difference. We have cc debt of 1,000 , 4,900 and 4,000. A personal loan of 4,300 and a truck payment of 500 per month. I also have to start paying back my student loans in a few months. The house we live in is too small; my husband wants to sell the house and pay off all the debt but the student loans (as the sale price would be able to cover all debt but that) rent for a year and then get a loan and build a house. What is your opinion?

Tiffany March 04 2010 9:24 AM

Hi, I am an avid fan of your show and really enjoy it. Your program is being offered in my community but do to a scheduling conflict I was not able to attend. I was appalled to hear by someone who did attend that you referred to some collectors as scum. I am a collector and do not consider myself scum. I try to work with as many people as I can to help them through difficult financial times. Many of the people do not want to help themselves they do not return your calls or change their address and phone number. Please consider changing your wording at future seminars to avoid offending people such as myself who are just trying to do their job.

Shari March 03 2010 7:06 AM

I am a twice divorced single mom of a 9 year old. We reside in Michigan, which as you know is suffering as a whole. My daughter and I moved here in the Fall of 2009 following my second marriage. At the time, our situation permitted me to work part-time so I applied and was hired as a part time bookkeeper/secretary. The marriage crumbled one year later and in the Fall of 2008 I put in an offer on a home that was accepted and finalized in February of 2009. I have put my self out on the job market for a full time job but have not been successful. Also, in the last 2 months, I have undergone surgery for a back issue and have missed several weeks of work which has set me back considerably. After having good credit and a great payment history, I started missing credit card payments and now my interest rates have gone from a reasonable 10.24% to a whopping 23.99%. Did I mention I have over $15,000 in credit card debt? Ironically however, my daughter's father is behind on child support in an amount close to that of my credit card debt. What I would like to know is this....Is there any debt relief out there for someone in my situation? I have recently applied and been approved for my daughter to be on state insurance which will save me a little each month. We are looking into food assistance, etc...However, with the interest rates now out of control on my credit cards, I feel like I can't get out from under this. Help!

Cathy March 02 2010 10:55 AM

My husband and I are searching for our first home, and a potential lender told us it is better for our credit to pay off our credit cards and continue to use them and pay them off each month rather than to pay them off and close the accounts. Is this true?

Steph March 02 2010 10:53 AM

My husband has around 8500. in student loans and we have around 7000. in medical bills from our children. He will get a bonus in 2 weeks and after taxes we will receive around 9000. So our question is do we pay off the student loan and then continue to pay the numerous medical bills or do we pay off the stack of medical bills and what ever is left pay toward the student loan? We pay around 300 a month toward medical and 145 on student loan. To me it would be best to pay on medical and use that extra each month to pay toward the student loan, but we don't know. We are not paying any interest on the medical bills, but there is 6% on the student loan. We do already have our 1000. in an emergency fund. Please help Angela

Angela March 02 2010 7:05 AM

Melinda-- without numbers, it’s hard to say. Three things occur to me, though. One, have you talked to the mortgage company? All the time, you hear about people who won’t communicate with their mortgage holder until they are well into foreclosure and it’s much too late. Two, you don’t mention if you’re trying to sell the house. If you can’t afford it, it’s much better to sell it for less than it’s worth than lose it completely and get nothing at all. Three, I guarantee late payments are small potatoes for your credit rating compared to bankruptcy. BTW, lesson 5 of Financial Peace University covers exactly this subject.

BKW February 26 2010 10:09 AM

Derek-- without numbers, it’s hard to say. How much debt? How much income? How much down payment? I could imagine situations where you could do both debt snowball and down payment saving at the same time. I could also imagine situations where you’d need to focus 100% on the debt and not even consider the house.

BKW February 26 2010 10:08 AM

Allen-- the DR response is yes, temporarily stop retirement contributions. I assume you mean your debt snowball is 2 years *without* the amount you’re contributing to retirement, so if that were also put towards the debt, you should be able to pay it off rather quickly. Plus, if it’s cc debt, the -25% interest makes the +8% return you might get on your retirement investments look minor in comparison.

BKW February 26 2010 10:06 AM

I understand the logic behind behavior modification. I am fortunate enough that my wife and I have communicated on the subject and we're going to go with the pay the high interest stuff off first. The snowball may be smaller in the beginning, but I'm fortunate that my wife is supportive of the financial plan that we've worked out together.

Kirk Toune February 26 2010 8:37 AM

My husband and I are in debt over $2 million. That includes 3 houses, and about $320K of unsecured debt, an RV and truck loan. All of the secured debt is not worth what we paid for it (of course!)My husband's a self-employed contractor and we're running out of work. We're starting the Financial Peace program through our church Mar.6 and I am very excited, however, I feel as though bankruptcy is inevitable. I would like to contact all of our creditors to request that our interest rates be lowered, is there a form letter I could follow?

Donna in Scottsdale, AZ February 26 2010 12:32 AM

No offense, Scott, but it doesn't sound like you're in a position to be a homeowner, so worrying about whether you'll qualify for an FHA loan is immaterial. I disagree that your credit score is unimportant -- as long as you continue to rent, you need it to be decent. But, staying current on your credit payments and reducing the amount of credit so you aren't "maxed out" will *improve* your credit score, so it sounds like your lenders are misinforming you.

BKW February 25 2010 10:23 AM

Jeramy, I'd go with the others who said pay off all the little credit cards. Not only is it following the snowball plan to a 't', but it'll also be easier for you to keep focused when you've got 2 debt payments rather than 6. That said, can you talk with your employer about withholding less of your salary? Tax refunds are nice when you get them, but that means you've been giving the U.S. gov't a $500 / month loan and they're paying you 0% interest on it. It'd be nice to apply that $500 / month to your car loan and citi credit without having to wait for April 15, 2011.

BKW February 25 2010 10:20 AM

What if you are falling behind on your property taxes/mortgages in order to keep up minimum payments? Is bankruptcy an option? Looking for part-time work, applying every day with no results. Credit is already ruined with late payments and they stay on your credit report for 7 years, why not just file bankruptcy? Your plan sounds great, but in reality I can't see it working.

Melinda February 25 2010 10:13 AM

We are new to the program and would love some advice: My wife and I are currently in Step 2(snowball) but we are also finding ourselves wanting to save some money for a down payment on a house. We have two children now and really need to buy a house to suit our family better. Any Advice?? Email me if you don't want to post a response. Thanks

Derek February 25 2010 8:50 AM

I am wondering if my wife and I should stop contributing to our retirement funds in order to pay off debt in our debt snowball. We have over two years left on our debt snowball and I don't want to miss out on those matching dollars from each of our plans. Help!

Allen February 25 2010 8:18 AM

we really have no debt but feel like we have no money! our only "real" debt is my jeep note, my husbands student loans which start in june and mine wich will start in 2012. my husband just got laid off and is seeking employment. what is the best way to get our jeep paid down if not paid off? there is around 3yrs left on it. we want it paid off by the end of next yr. what can we do. (mainly when he gets back to work) he's very money smart but im not. we have no cc's. he's had accounting and knows numbers like no other! thanks for the advice. :)

Sara February 24 2010 11:28 PM

Here is our situation. We owe on four different credit cards, with the following balances: $21,000, $17,000, $5,000, and 12,000. We had been able to make over the minimum payments on everything until my job went downhill. Now, we cannot pay the minimum balance on every one of the cards and haven't paid on three of the cards for the past six months. What should we do? Obviously, we should work on paying off the smallest card first, which we are paying on, but what should we do about the other three cards, try to make what payment we can a month on each of them or what? I have tried to work with each of the cards and they refuse to lower payments or the interest rate. I would gratefully appreciate any advice that you have!

Kathy February 24 2010 5:06 PM

Need advice. Our vehicle was repossed and not sure whether to come up with the money to pay off what is due or just have them keep it. We purchased the vehicle when we were desperate we needed a vehicle and because of our credit we had to go with this company they were the only ones that would finance a vehicle for us. They charged us a very high interest rate and after 3 years we still owe 18000. After listening to you I know this was a bad decision we should have purchased something we could have paid off. Please help

Pat February 24 2010 2:01 PM

I'm almost done with Baby step 1. Once I'm ready to begin the debt snowball, should I still make contributions to my savings account? My savings account requires that I transfer at least $25/month into it to avoid fees, so I was thinking I'd stick with $25/month and put the rest into baby step 2. Any thoughts?

Rob February 24 2010 11:20 AM

Jeramy, Pay off the Credit Cards!! Get rid of all the Credit Card debt then attack the car debt with gazelle intensity or as DR says sell the car outright and buy a car outright with cash and have no car payment. By all means use the money to get all Credit cards payed off first. Scott, Pay off your debts and forget what your lender tells you. They want you to keep credit/like DR says you dont need to worry about your credit score because you will be using cash. Pay off your debts. Good luck to both of you and God Bless. We are all put on this planet to help each other out. Hope all goes well for the both of you.

RSA February 23 2010 8:54 PM

Jeramy, kill the car debt and free up the $335. You can kill two of the credit cards with that. You will still be in a position to pay off your cards given time, then you can rebuild your savings quickly with no payments.

Robert February 23 2010 7:34 PM

I think the classic debt snowball approach will give you a sprinting start into debt freedom. Eliminate the 3 store cards and BOA Mastercard all at once using your tax return. Is the $9000 in savings separate from your Baby Step 1 emergency fund of $1000? If not, leave that $1000 of cushion in your savings account and use the rest to make a serious dent in that car note. Then tackle the Citi Card with full force at the end. Good luck to you!

Evan H February 23 2010 6:30 PM

Asking for advice... I have a number of collection accounts on my credit report that I owe and want to pay. My credit score is low and just at a cut off for an FHA loan... My lenders say "don't pay them off now , it will hurt your credit score immediately! Is this true?

scott February 22 2010 10:48 PM

In a bit of a "good" pickle here and was hoping to get some help: My wife and I have three department store cards with $50, $250, and $750 balances. Then we have the big bank cards: BOA MasterCard with $3,000 and Citi Card with $9,000. Follow me here - we also have the car loan with a balance of $8,100. The car payment is $335/month. We just received a tax refund of $6,000 and that makes $9,000 in the savings account. Do we: 1) Pay off the small department cards and BOA MC and free up $112/month and have $4,700 left in the tank? 2) Pay off the car and free up $335/month and have $1,000 left in the tank? I know that paying off the car will free up $4,000 per year, but we've also never been in a position to completely pay off four of our other credit cards (3 store cards and BOA Mastercard). Any help would be greatly appreciated!

Jeramy February 22 2010 8:19 PM

GMC - If possible, do not cash out any retirement savings due to the incredible withdrawal penalties and more importantly the future growth potential of that money. How much have you been able to pay off in the past year and a half? Tracey - I'm a guy and I'm stubborn. Your husband might be clinging to the financial plan that he wrote up and is embarassed that it is not working. Tell him to give the Dave Ramsey plan a try for 6 months. Compare it to the past 6 months of your current plan. The results should be pretty revealing and I bet he will catch on. God Bless and good luck!

Evan H February 22 2010 3:27 PM

We have been trying to pay down our debt for about a year and a half. Some small progress but a way to go. Would it be a good idea to cash in our retirement and pay off the debt ($30k)and start over? We are in our mid 30s.

GMC February 22 2010 12:38 PM

I am not sure about my hospital bill debt. In 2004 I went snowboarding for the first time and hit a tree with my head and had to get ait lifted to the hosiptal were I had 2 brain surgeries and I was ina coma for 14days. So after I got through everything with no side effects:-)I ended up with a $86,000 BILLfeel behind on a couple credit cards that had under $1000 on them and I didnt have health insurance.Not done yet, then on may 17, 2007 I got jumped by 3 military guys and broke my jaw in two places and that bill is $20,000 and then again on May 19 2009 I got jumped again by 6 military guys and that bill is only 3500 because I have insurance through my jon now:-)So I really dont have much debt from spending its all from being wreckless with myself. So how can I start taking care of this before I start getting my checks garnished? I have a 6month old son now and I cant afford to have them garnish 25% of my checks every week, and that per hospital. All three of my hospital visits where in three different hospitals.HELP PLEASE!!!!

joe quinones February 22 2010 10:29 AM

I just paid off a $3,000 credit card debt, and I keep logging onto my Citi account just too look at the "$0 balance". I am 21, just graduated college, and was always taught that credit cards were necessary. Not true! As soon as I build up my emergency fund, I'm cutting up the credit card for LIFE! I'm currently going to graduate school with a perfect program for me and PAYING CASH!! No more student loans for me!! After I graduate I will be begin attacking my remaining student loans. I am so thankful I came across DR before I made more mistakes; I'm going to change my family tree!

Erin February 21 2010 10:51 AM

This first part is for DS. Everything that I give as advice is all based on Dave Ramsey's Book the Total Money Makeover. I do not take credit for any of his ideas, I just like to pass along his advice because it is helpful. DS the first Baby Step is to save $ 1000.00 if you have the ability and income to save $1000.00 and start the debt snowball by all means go for it. If you dont save the $1000.00 FIRST then get "gazelle intense" on paying down those debts. This next piece is for Maria. I am not sure if your repayment plan is a good idea or not. According to DR pay the minimum you can on each account and pick the lowest balance you "owe" and attack it first. Once you get it eliminated then choose the next lowest one, this is where he describes his debt snowball effect. I hope these comments help. Good luck and God Bless.

RSA February 20 2010 8:26 PM

I'm committed to ending a long-standing relationship with Mr. Wells Fargo credit card. My balance was up to $10K, but I knocked it down to $6300 with my tax refund. Now, I've been awarded a $5K scholarship. Mr. Wells Fargo credit card, you're getting smaller and smaller in my rearview mirror... Thanks, Dave Ramsey! Blessings to you & everyone!

Susannah February 20 2010 1:36 PM

I finished reading about the snowball plan this morning and cut up my credit cards! I have my emergency fund in place as well. Here is my senario/question for anyone who is familiar... 4 forms of debt excluding my home 1. $1000 medical bill (they've set up a $100/month payment plan with 0% 2. $1700 retail bill with 0% interest for 12 more months 3. $2500 CC bill with 14.99% interest 4. $14200 CC bill with 24.99% interest I am fully motivated and don't feel I need a huge boost in confidence so would it be ok to start paying off the 2 loans with interest rates even though they are higher than the other two??? I'm struggling with DR concept on this... Any advice?

Natalie February 19 2010 11:37 AM

I owe 170K on my law school student loans. The interest rate is 6%. I am not a licensed attorney yet. I am taking the bar exam next week. I am thinking about doing a Income Based Repayment Plan but I am unsure if this is a wise idea. Whatever money I don't pay off in a month gets added back into the balance once I get a better paying job. I am out of deferments at this time. I took a second job last May and all of the money from that job is paying off my debts. I still have a couple outstanding debts. If I pay the full student loan monthly payment of $1,000 I will not be able to aggressively pay off the other debts. At this point my second job would be covering the student loan payment each month. Any thoughts would be great! Maria

Maria February 19 2010 8:13 AM

My question is do you save your emergency fund first then start the snowball debt or can you do them both at the same time? I'm just starting and I was just curious.

DS February 18 2010 3:45 PM

Paid a small credit card off this month. The statement came with a zero balance. That was cool. oh my interest rate went up.lol whatever credit card companies!! Next attack medium department store card. stand strong friends u can do it!!

thegreatenabler February 17 2010 1:01 AM

I have been asking (no begging) my husband for months to just try DR's program. He has all but refused so I decided that if I would just sign up for a class in my area that he would give in and go. Well my plan backfired Big time. We didn't talk for nearly two weeks and once we finally started talking he said he would go only if it was free but that nothing in life is "free" so he would never worry about cashing in this offer. Our financial plan is a joke but I don't know what else to do. I am beginning to resent his attitude now. Signed, Hopelessly in Debt 4Ever

Tracey February 15 2010 11:07 PM

I only have 2 bills outside of the home bills. I have put my student loan into forberance and am lowing all my other bills so i can pay of the other two we have. one is 500.00 balance and the other is 3500.00 which is the student loan. What should i do next?

cb February 15 2010 8:12 PM

Cherie, usually during the forbearance period, interest continues to accure, which means that the student loan debt will increase. DR's take is that you always pay at least the minimum payment on all debt, while snowballing. Hope this helps.

Todd February 15 2010 3:57 PM

Cherie, I don't remember DR mentioning forebearance in his book, FPU, or on the radio, but based on what he does say, I'd think if you're eligible, it makes sense. Putting nearly a thousand dollars a month toward your other debts (which presumably are smaller and are at much higher interest rates) should knock out some serious debt in a hurry. Since that's the entire point of the debt snowball, it makes sense to me. As an aside, doing the quick math on your student loans, it appears that's a fifteen year repayment. I didn't realize they did student loans longer than ten years.

BKW February 15 2010 12:19 PM

I had credit cards for my business, 2 that were max, credit of 20,000.00 each. I used them many times and payed them off. The balance is 0. But the card company change my credit to 6000.00 on one and 2000. on the other. And int. went out the roof. So why do they make us who can(thank God) pay our bills suffer? You would think they would give us the big brake. Guess Im doing something wrong.

LP February 15 2010 7:43 AM

What's Dave Ramsey's take on student loans? I'm working my debt snowball, but I have over $150K in student loans--which comes to about $900 per month in payments. This is my largest debt and my lowest interest rate. I can get a forebearance and use the money to work the debt snowball. Should I apply for a forebearance?

Cherie February 12 2010 3:24 PM

Hi, my house has been foreclosed on and I am waiting for the house to go toaiction at which time I will find out whether there will be a deficiency, I have started my debt snowball but wonder if i should continue until the outcome of my home being that if there is I would file bankruptcy, or should I continue to pay off my reponsibility and file on only what I truly cannot pay?

April Peele February 12 2010 11:15 AM

Bob, as RSA said, it's something to be careful about. If by debt negotiation, you simply mean contacting your creditors and trying to come to an agreement about a lower amount you could pay back, DR encourages that. If you're talking about hiring somebody who is a professional negotiator, you want to be careful. There are companies that could help, but there are also plenty who will take advantage of you and charge you a lot for the same results you could've gotten on your own.

BKW February 11 2010 3:45 PM

Bob, DR's advice on Debt Negotiation is to be very careful of who you go through. He talks about it in his book The Total Money Makeover. If you get the chance you need to read this book it really gives you his ideas and how to apply them. If the 39,000 is on mulitiple cards he would suggest pay minimum payments on all and pay off the smallest one first. If this is all one card you may be able to negotiate directly with the Credit Card Company for a settlement. Like DR says they would rather get something from you rather than nothing if in the case you go to file bankruptcy. Hope this helps. God Bless and Good Luck.

RSA February 11 2010 1:04 PM

I have $39,000. in credit card debt due to unstable work. I am currently working cocsistently as apaint contractor but that can always change.My wife and I live simply but this debt is killing us. We have made all the minimum payments and are current. We have been considering debt negotiation.What are your thoughts on this?

Bob February 11 2010 11:58 AM

I have a question? I have some closed accounts that I have not been paying anything at all,5000 and 1 that I am 6 months behind 4500,and 1 that I am 2 years behind4500, 4 are up to date 3000 where I have been paying minumum payments I was unemployed from Dec. the 5th and I,m starting a new job in Feb.22th my question, should save up for emergency fund before paying these debts?

Enrique Klass February 09 2010 9:27 AM

Should I sell my home and become debt free. I can move to an apt at 1/3 the cost and have enough to fully fund my 401K.

Tanker February 06 2010 4:01 PM

This comment is to Catherine, I think that a disclaimer they all tell you because the last two credit accounts that I closed they told me the same thing. I asked how can I owe anything when my account balance is zero. The operator told me "sir by law I have to tell you that when we close your account". I wouldnt worry until you see the statement, I would bet it will say zero balance. My wife and I started Dave's plan in November 2009, all I can say is thank you DR!!!

RSA February 05 2010 1:40 PM

Just wanted to encourage all of you with your debt snowballs and the DR plan. We paid off over $15K of debt last year by dumping our new car. It wasn't easy; we took a $1,500 hit, then had to spend between $3-$4K getting a couple of used cars. The credit cards went up and down, but we finally managed to save our baby emergency fund of $1,000 and start rolling on the snowball. Medical bills went first, about $900 worth owed to 3 or 4 doctors. Then we got an extra payday or two and knocked out a $2000 Chase card. Still had $7,000 on the Discover, managed to get than down to $2,000. Then the car broke down - $1,000 for a new transmission. But guess what? We paid for it with our baby fund!! That felt SO GOOD. We are $300 away from re-funding our baby fund, and ready to start the snowball in another week. I can't wait to be DEBT-FREE except for the house and start working on our big emergency fund. We have faithfully given to our church the entire time, and God has blessed us with a 2nd job for my husband and my income has risen dramatically doing the same work - I feel like I'm living a miracle. Put God first in all you do, and whatever happens, don't give up. Sometimes it's one step forward and two steps back, but just be consistent and you'll be amazed at what you & God can accomplish together. I wish everyone well.

Kimbo February 04 2010 12:55 PM

My husband and I found Dave and started following his plan April 1, 2008. When we started seeing that snowball get bigger and bigger it was so exciting I couldn't waite to cross the "another one bits the dust" off our list. We volunteered at Dave's Houston event last January and we were lucky enough to work the book table in the Platinum room where he was having lunch and a 30 min question and answer session with the people that paid like $300.00 to have lunch. We even got to see the whole Total Money Makeover for free and had seats right next to the stage. I was even able to meet and take a pic with Dave! My husband and I were more pumped than ever and i worked OT at my full time job and got a second job. Every dime we made including my quarterly bonuses when to paying down debt. We were debt free of $63,000 on May 30th 2009 and we have a fully funded emergency fund of $20,000 as of December 2009. We are now contributing again to our 401K's and have set up our Roth IRA's. The house is next. We are projecting 2 1/2 years!!! We lived life like no one else and now we are living life like no one else!!!!

DannStace February 03 2010 2:40 PM

We are debt free.We retired at 50 and have traveled the country the last 10 years in a motorhome..we have sold the motorhome and started renting a home in Fl. Rent is $900.00 a month..I'm happy not owning a home, but second guessing myself in not using this money towards purchasing a home for investment purposes.

Lee February 03 2010 10:42 AM

I paid off last of 7 credit cards on 1/28/10. today I called to tell them to cancel my card. The balance is zero, the account is closed, but the man said I would get a statement after the 2/15/10 billing cycle and would need to pay whatever the statement said. How can I owe money after the billing cycle when my account is closed TODAY and my balance is zero? Could someone help me understand?

Catherine February 01 2010 4:37 PM

Milisha and anyone who wants to set up their snowball in Microsoft Excel- If you list all of your debts (smallest to largest) in the first column, minimum monthy payment for each in the second column, you can create an adjusted monthy payment in the third column. Like this: Column A Column B Column C 1]Owed- Min Pay- Adjust Pay- 2]2,000 50 =B2+budgeted extra cash 3]3,500 75 =C2+B3 4]5,000 100 =C3+B4 5]10,000 250 =C4+B5 If you set it up this way, by the time you get to the 10,000 debt you'll be paying $475 because the minimum payments for paid debt will roll down (snowball effect). I did this an I'm paying $730 minimum per month on my student loan instead of $225. I'll have it paid off by July 2010 :)

Amanda January 31 2010 5:01 PM

I have a problem all my creditcard are in collection. I started paying them off but is that a good thing to do.I also have no emergency fund I am living paycheck to paycheck.This is very frustrating to me.

mags January 30 2010 11:37 PM

For Kathy on Jan 23, first, glad to hear you're now in a safe place re: your relationship and that you're taking care of yourself. Second, good news is that $12K isn't an insurmountable amount of debt, since many people have much more. That said, I'm wondering about your budget -- does it currently balance? You mention three items -- tithing, a large mortgage, and "small luxuries", so let's tackle them one at a time. With tithing, let's point out that your 10% debt that year is a coincidence, since I doubt your church was accepting credit cards, which means it wasn't your tithing but *other* spending that was the 10% debt. With your house, we just sold our home in a tough market, so I do sympathize with you. The real question may be whether if you're living alone now, if you still need the house you purchased for your entire family. Yes, you might lose money, but if you can't afford it, you can't afford it. Compared to rent, the question isn't whether you could rent a similar house for less, but whether you could rent a smaller condo for less. But's let's assume you're right -- you're stuck in this house. As far as the small luxuries go, sounds like you've already determined you'll eliminate those, although I'll caution you a little bit to make sure you have some *budgeted* items that are non-necessities but are things you really enjoy. I'm not talking about splurging on things not in your budget, but if your budget is so spartan that you're shivering in the cold eating only saltine crackers, you'll be so miserable you'll never stick to it. So, hopefully you can figure out these budgeting things and get the cash flow to a place where you have some excess money to apply to the debt snowball.

BKW January 29 2010 9:02 AM

We have what seems like endless debt. There are a few things that we haven't even attempted to make payments on and they have gone to collections by now I am sure. We make the minimum payments on everything else. I know it is our fault for living beyond our means and on credit. Only one of us works because with three kids under 5 daycare is to expensive for both of us to work. Our annual income is 24,000. This year my husband will get some extra monthly income because he agreed to travel. We want to use that money to get out of debt. Do we start with the old debt that has already gone to collections or pay off the debt that we are current on the monthly payments but only making the minimum payments?

Ashley H January 27 2010 6:24 PM

I'm really stumped, all my money literally goes towards bills. How can I snowball my debt when I'm already paying the minimum monthly payments on credit cards as it is now and the rest goes towards living expenses i.e. rent, utilities, and phone. We don't have cable and recently had internet shut off. I've been applying for part time jobs, have interviewed, and no luck! What's the next step?

Confused January 27 2010 9:57 AM

Emily, Yes, stop your debt snowball and replenish your emergency fund back up to $1000 (Baby Step 1). This will avoid any future emergencies from going on the credit card. Good luck to you!

Evan H January 26 2010 2:01 PM

I have read Total Money Makeover and Financial Peace Revisited. Is it worth the $$ to take the FPU class also? koko96 Jan 12 - bday parties do not have to be expensive. Especially for a 1yo. Make a cake. Or buy a mix, frosting and sprinkles for $5. Buy a very cheap gift. A 1yo won't know the difference. I've even wrapped up a toy we already had for one of my 1yo parties. If you want to serve a meal, make sloppy joe's. Blow up balloons yourself for decorations. The party and everything you spend on it is for YOU, not the 1yo. She doesn't even know what a birthday is.

kiysa January 25 2010 10:36 PM

I think the plan works well but you have to stay disciplined and you should. I paid off 2 student loans with about $10,000 in combined balances, smallest balance first. It feels fantastic even though the student loans were at less than 2% interest and other items -CCs- are 15%. Wife's van is next along with credit cards and then tackle the mortgage. Do this yourself: Mow your lawns, clean your house, iron your clothes, cook your food, clean your car, watch tv not cinema, etc. Pick up a second job (do all of the above for someone else, there is always someone in need or does not follow Dave's plan or does not need to). It'll be a change from your previous routines, but you're the one trying to get out of debt so sacrifice, sacrifice, sacrifice....

Dhiraj Sood January 24 2010 10:34 PM

My wife and I officially started this plan in September of 2009 and have paid off $6,000 of $94,000 of credit card, line of credit and time share debt in that time frame. We plan on using some of our tax return money to boost our debt payoff. My goal is to have these debts paid off by July of 2012. Please wish us luck!!!

MJB January 23 2010 10:22 PM

I am a survivor of a long abusive marriage. I know my attitude sometimes has been to "comfort" myself with spending. I am about $12,000 in debt. I am partially retired out of necessity because of a layoff. I did find two part time jobs but at 62 my energy isn't what it used to be. The teacher retirement system limits my income above my pension. My pension is not large because I spent years at home raising my kids. My only asset is my house with a fairly large mortgage on it, though a good interest rate. I have not been able to accumulate $3000 for my taxes on my home yet this year-to say nothing of an emergency fund. I beat up on myself a lot. I tried tithing but ended up in debt for precisely the 10% tithe I gave that year. I know I need to eliminate ALL small luxuries (and they are small) and find yet another source of income outside of teaching. I can't sell my house because of the horrible housing market where I live. I also doubt I can rent for less than my mortgage. I will start to follow the plan-it has to beat feeling sorry for myself. As sad as it seems, my biggest fear is dying and leaving a financial mess for my kids to sort out. I need prayer for wisdom, perseverance and trust in God's Providence.

Kathy January 23 2010 10:11 PM

I just found this site. I have been in debt since i was 19. i was never counseled on the up and downs of credit. I am a single mother working off of just my income. I filed bankruptcy a few years back and after that I still could not get on the right path. I have just gotten myself on the path of trying to maintain my life and my debt. I have about $10,000 left in debt including my car. Recently i have started paying on all but one of my debts. I do not have an emerency fund I just have to have faith that things will work themselves out. I know that I need this but i do not have any extra money coming in right now. I did not see any other post that are in my situation but I think that I am on the right track. i know that it states that we should not acquire anymore debt but I am currently upside down in my vehicle loan and starting to have issues with it. I have tried to trade it in but because I owe more than it is worth they are looking for a down payment that i just don't have. What am i do any advice would be great. Once I pay my monthly bills and children daycare I am broke. Some one please give me some advice. I want to have hope that there is light at the end of the tunnel and I am not just spining in circles and making more poor choices.

Jazzy January 23 2010 12:15 PM

I am following the debt snowball plan and have had a barrage of unexpected expenses and have depleted my emergency fund to $200. Do I stop paying extra on my smallest debt until I can get the emergency fund replenished? Thanks in advance for the advice.

Emily January 23 2010 10:30 AM

Debtor, certainly your math is correct, and DR would agree with you. If you can list out your debts the way you describe and keep to the program, do it! Getting rid of debt is getting rid of debt, however you do it. What is not "silly" about the debt snowball is the psychological aspect of it, since all the math in the world won't matter if you're not motivated to *do* it. After working with thousands and thousands of families, DR has determined that the psychological "boost" of knocking out some smaller debts up front is more effecive long-term (even if the straight math approach would have saved a few hundred or a thousand bucks if they could stick to it). Now, that assumes the debts are of various amounts, and there are some fairly small ones in there. If you only have two loans -- say, two cars, with one of $15K at 2% and another of $20K at 10%, obviously the motivational aspect fades into the background and you're going to want to tackle the 10% debt first. For Todd, absolutely pay the minimum on every account. DR never says anything otherwise -- you signed an agreement and you are obligated to pay the minimum amount. The question DR answers with the debt snowball is where to put the money *beyond* the minimums.

BKW January 23 2010 8:46 AM

I do not understand the compounding formula (cumulative and remaining payments)in the snowball method of Dave's plan..Very anxious to get started on the road to being Debt Free. Can somebody please explain it to me so I get it right the 1st time.

Barbie January 22 2010 8:34 PM

I am so motivated to start my journey towards a debt free life!! Congrats to those of you whom have reached that status. I was just wondering if you all suggest I close all of my credit card accounts now as I pay them off or simply just pay them off and leave them open? I understand that I will no longer need them as I will be using straight cash...oh what a feeling that would be.

Jean January 22 2010 3:45 PM

I'm reading most of these comments. I did gain some wisdom. I have considered CCC options. I'm hearing other options but by shorting one creditor to gain that amount you would pay to pay another card is a good idea but you still end up with late payment fees, ect...and take the hit on your credit in a few short months. How is this any better than going through a CCC debt management program? I read the info. on this site and it has changed my mind a little. Still wrestling with the idea. There are even many 'christian' organizations out there to 'help' such as this site. Why not trust them? I don't agree with the bankruptcy or settlement idea. Any insight?

Debtor January 22 2010 2:52 PM

Colleen, It sounds like you are doing the right things regarding your budget. Baby Step 1 is the $500 - $1000 buffer you need to protect you from the emergency car repairs and unexpected things. I know it is difficult but pay the minimums on any cards and sell anything you don't use until you can get together that $1000. Good luck to you and God bless!

Evan H. January 21 2010 3:27 PM

If you have multiple credit cards and you attempt to pay more on one card to pay it off first and as a result do not pay the minimum amounts on the others, are you going to dig yourself further into debt with penalties and late charges?

todd January 21 2010 2:17 PM

This is a good plan, but it’s silly to not pay the highest interest debt first. That is throwing money away. If you need the psychological boost to get the snowball effect, create a column in your list of debts that shows the amount of interest you pay each month to each debt. Then sort them so the most interest paid per month debt is listed first then list them all in descending order under it. It will be a bigger boot and make the snowball roll faster if you have more to use to pay off and you will have more by paying the highest interest rate debt first. How good will it feel when the highest one comes off the list…then the next highest ones comes off the list..Etc

Debtor January 20 2010 10:54 AM

On baby step 1 I am using my cafeteria plan to help me save back. I already committed to putting in x amount of dollars for the year, they take it from my check, and if it is really an emergency then I can used my save medical receipts to cash in and get the money in a couple of days. If I have money in my pocket it'll just burn a hole right through it, but if I have to think about it and make effort to get my easily liquidated funds it isn't so easy. So far it is working for me.

Meredith Curry January 19 2010 2:14 PM

This program is amazing! My husband and I were introduced to this program last May 2009, we purchased and started the program first of June 2009! It is almost February 2010 and we have paid off over $25,000 in debt in 9 months! That was with taking off December for Christmas presents! :) It takes a whole lot of prayer, sacrafice and discipline! If you cant relearn your spending habits you will never succeed! We dont have a lot of income, we sacraficed by selling a TON of stuff we thought we needed and paid off debt. We stopped buying, and started paying off credit cards. It goes super fast once the first credit card is gone. We were seeing results in no time! We have saved over 1500 a month in just outgoing payments! Dave Ramsey you are sent from Heaven! My kids know who you are. Our saying in our house when we want something is "what would Dave say?"

Mommy of 3! January 19 2010 12:13 PM

Reading this sounds great and it makes sense, but it doesn't tell us how to deal with the stuff in life that comes along that shoves you back down and keeps us from getting debt free. How do you save money, when there isn’t any to save? I'm at an all time emotional low right now. I'm feeling overwhelmed that every time I turn around something else is going up that I have no control over. A $10 a month increase in the electric bill might not sound like much (I have my utilities averaged which helps budget), but add that to an increase of the gas, water, phone, health insurance, groceries, etc. as well and it really puts a dent in things. The property taxes and home owners insurance has increase because of the way they calculate it now (I've called them to see about other options, but right it looks like my house payment will increase an additional $75-100 a month). How do you get credit cards paid off when you have to use them because you don’t have another option? For example, I made a $200 credit card payment, but then the car broke down and it cost $600 to get it fixed not to mention that my roof needs to be replaced. Then there are the credit card companies themselves who have made it harder to pay them off. My interest rates jumped up when they took away my fixed rates. I also keep hearing about other ways they're trying to collect more fees. I've never paid late, went over the limit and paid more than the minimum but that doesn’t matter. I’ve looked at ways to cut back, but with the constant rise in cost of things, I am running out of options. I rarely eat out (if I do it’s somewhere cheap) and on the rare occasion I go to a movie, it’s at the $2 show and I don’t get anything to eat or drink. I’ve started looking for a part-time job, but there’s not much out there. I come home from work mentally exhausted and the thought of having a second job is depressing. I know I’m not alone, but that just doesn’t make me feel better. Makes me feel worse as a matter of fact, that so many people are in the same boat and it doesn’t look like it’s going to get better.

Colleen January 19 2010 10:22 AM

I don't know what to do. I lost my job and my husband's income is not enough for all the bills we have. I want to do the snowball, but we don't have enough money coming in for everything. I'm scared and worried. Can you help?

Cinda January 18 2010 5:13 PM

hi, whats the formula to setup dave's debt snowball into an excel spreadsheet? thanks

Milisha January 18 2010 9:50 AM

BKW, Thank you very much for your comment. I am sending $10 to all our medical bills (except smallest one) along with a letter asking to lower our bill. You have really encouraged me. I am not feeling so defeated. Thank you again for your wisdom.

Yvonne January 17 2010 9:20 PM

Christel,your story is really encouraging!Congrats!My wife and I started looking at our 10K CC debt and our 240K mortgage a few months ago and deciding to get rid of it.We live paycheck to paycheck on my 50K/year and with two kids,we know we are in a risky situation considering the economy and current unemployment levels. We started getting serious about our debt two months ago and we've already paid off 5 grand by selling things,cashing in savings bonds,and using our tax return strictly for debt.We've never used a budget in our house until now,but its made a HUGE differance and we stick to it because we hold each other accountable!We also now have the chance to Refinanace the house which will save us $200/month. I am SO EXCITED to be debt free in the near future! Im skeptical about seeing our mortgage get paid off any time soon, but we're going to attack it with Gazelle intensity! Thanks Dave!

Dale Carns January 17 2010 9:08 PM

Yvonne, great question. If I've understood DR correctly, he'd recommend paying some small amount on each of the medical debts, even if there is no minimum. Even $10 a month reminds them that you're at least making some effort toward paying that debt. And, if you can do what DR suggests and chart out exactly when and how you'll pay them back -- e.g. "I'm currently paying $300 per month of my debt to Dr. X, and it will be paid off in August, then I will pay $300 / mo. to Dr. Y" -- they'll usually be happy to know they'll get paid. That said, in Financial Peace University and his books, DR talks about negotiating down your debts, and that's even *more* possible with medical debts than cc's. Even with a basic doctor's visit, they'll charge $80 if you have insurance, $120 if you don't. So call them and ask to have your bill reduced. If it doesn't work, wait a week, and call again. Then try again. As DR says, make it your part-time job! :>

BKW January 15 2010 10:11 AM

To all you nay-sayers...the Debt Snowball really works!! It has been a true blessing in our lives! When we first started, it did go slowly but once you get rid of 1 or 2 of your smaller debts your snowball gains momentum. My husband and I started out with $25,000 in debt, and we originally thought it was going to take us 1 1/2 - 2 years to become debt free. As we went through the process, it would be going great but then we would have to use our emergency fund for car repairs ect.. but we would fill it up again and keep working on our snowball. We were Gazelle Intense, and worked really hard and we were able to become debt free in 11 months!!! The debt snowball really works, and since then we have been able to coordinate an FPU class of our own. We are SO greatful for finding Dave Ramsey. LIVE LIKE NO ONE ELSE SO LATER YOU CAN LIVE LIKE NO ONE ELSE!!

Christel January 15 2010 10:00 AM

Just a quick laugh (and I know you will). I am in the process of paying off 4 credit cards totaling $30,000 using the Debt Snowball Plan. While I am concentraing on the lowest balance first, I continue to pay the minimum payment on the remaining three. One of my creditors (BOA) sent me a letter stating they were lowing my credit limit because I am only paying the minimum payment! Can you imagine with thousands of folks not paying at all, I, with excellent credit get my hand slapped because of paying only the minimum. Credit cards NEVER AGAIN!!!!

Barbara January 14 2010 3:24 PM

Does anyone know how you handle medical debt with snowball? We have over $5,000 in medical debt due to different Dr. None have a minimum payment amount. Do I send $ to all of them, or ignore all but the smallest and put all the snowball $ there? Then keep paying off the smallest?

Yvonne January 14 2010 5:34 AM

In response to Robin, even though it sounds like your husband is a bit of a bum, as a guy, I still found myself taking his side while reading your note. Big baby, immature, whiner... regardless of the situation, no guy is going to respond to that. I understand your frustration and I'm sure your intention is to "wake him up" and help him see reality, but please believe me, unless he is shown some more respect than that, he will not respond to you. You'll just get more frustrated and he'll feel more and more belittled. That's just how guys work.

BKW January 14 2010 2:57 AM

the basics, I am aabout 20K in cc debt. I was able to make miniumn payments up until a couple months ago. Now I am behind on them. I am going to do the snowball plan, but my question is what do I say to the CC companies so I can get started. I can't sleep, I am stressed, I do have a second job that will help some but right now what do i do.

Sally January 13 2010 3:50 PM

Where do I start. I bring home about 950.00 15th last day of month. that is after taxes, medical, and 401 k i put in 6%.i am not going to itemize my bills lets just say my bills are more than what i make per month.i have my hubby who gives me extra cash sometime put he has bills also i.e student loans. i am so stressed about $$$ i hv never been in a situation like this i have paid my cc bills off twice and now i am back in the same boat with extra bill on top. its so bad my little gurl bday is next sat. and i dont even wanna have her 1st bday party because i dont hv $$ but i feel like that is not fair to my baby. i am jsut so depressed. HELP

koko96 January 12 2010 5:29 PM

My husband and I are currently in a debt management program and really struggling. We are considering a debt settlement company. What are your thoughts? Should we do the snowball thing first? The Debt settlement company says they can settle for 40% or less of what we currently owe. This would also make our payments half. I am so confused. We can't keep doing what we are doing- it is sucking us dry, but we are leary of the settlement thing. I need advice PLEASE.

Lori January 12 2010 10:23 AM

This is the first time I've been on Dave's site. Looks very promising. I couldn't find suggestions for a woman with children undergoing great financial need because of husband's out of control spending, deep debt and who is unwilling to make changes to his lifestyle. His unwillingness to support them properly drains her small paycheck. Does anyone have any advice on what a wife can do to help herself in this situation?

Carolyn January 12 2010 9:25 AM

I just dont know how to start because I have more month than money. I am exhausted by this mess. is Credit counsiling a good idea

Russell and Stephaine January 11 2010 9:45 PM

Finding Dave Ramsey was one of the best things that has ever happened to me. He's brought me hope. He's brought me the light at the end of the tunnel but most of all he's also brought me closer to God. For all of you wondering 'What do I do?' or 'Where do I start?', I say start with attending his FPU class. Ironically enough it was the last thing I put on a credit card. I wanted to get out of debt soooo bad that I couldn't pass up his class. I am currently working on my debt snowball. I have called all of my creditors, closed all of my cards and asked them all if they had a payment plan for someone in financial hardship. All of them gave me a better plan than I was currently in. I know have lower interst rates (some at 0%)and set monthly payments. I am now able to pay the minimums on all and focus on my 1st snowball. It still seems very overwhelming at times but knowing I have God's support, Dave's support and the support of my new found Dave family, I can see the light at the end of the tunnel. DON'T give up! Take his class and find the peace in Financial Peace University.

Erin January 11 2010 9:17 PM

I am finally going to a Dave Ramsey financial counselor... now their guidance is making this seemingly impossible financial mess I made ($120k in debt, single parent, income $65k), completely doable. Things I would have never thought of in a million years is what the counselor is showing me. I finally, finally, after two years of taking the class and changing my spending behavior... and on to the next step.. truly tackling the baby steps. I HIGHLY recommend that everyone see a Dave Ramsey counselor. I am kicking myself for having waited so long. Truly. May God help us all to change our family trees.

Cheryl January 09 2010 11:29 PM

I have one debt left, student loan for $17,000. I have two cars, one a work car and one a 2004 Toyota Sequoia paid for, should I sell it and put the money towards the student loan?

Sabrina January 08 2010 7:22 AM

My husband is truly a big baby whining about our debt, passing the buck on others (mainly me), and not owning up to his share in creating the debt, nor is he willing to be a part of the solution! All he wants to do is blame, blame, blame-that's the name of his game! If he could ever pull himself out of the immature negative crap pit he's in, maybe we could go somewhere with this and become debt free! Overtime is no more, we're sinking, have cut everywhere we can, and he refuses to get a 2nd job! It's good sense! You lose hours, need to put food on the table, you're able-bodied, rake in the dough! I'm tied to caring for the child, home and EVERYTHING else. All he wants to do is whine!! Is there a job for whiners because my husband sure would go far in such a position! It's in his blood! ~Fed up!!!

Robin January 06 2010 7:47 PM

Niki, I like your attitude! You can do this and you seem to really have a plan for making it through this stretch. My only advice would be to sell one or both of your cars and get reliable used car(s). $42000 in car loans is very high, think of the dents you could make in your credit cards, student loanS, and real estate with that money. Also, re-work your budget to find any extra money that you can put toward Baby Step 2. For example, trim down your cable subscription and go with Netflix or raise your insurance deductibles since you have the emergency fund in place. Good luck to you!

Evan H. January 05 2010 5:11 PM

My husband and I are 26 years old and have a 7 month old son. Collectively we made $100,000 dollars (husband in construction management and I teach 7th grade social studies). My husband lost his job back in October, reducing our total steady income to $46,000. We have just committed to becoming debt free even in the midst of these hard times...we feel this is our top priority for our family's well-being. My husband has off and on income coming in, but we're not sure month to month what it will be. We have hopes of his recruiter calling with another job opportunity, but meanwhile my husband is making money doing side construction jobs and looking for a part-time job. We have our emergency fund set aside and now are beginning tackling our debts ($1,300 credit card, $4,000 credit card, $8,000 student loan, $12,000 real estate-lots, $42,000 car loans). We are fully committed....any helpful advice....motivational thoughts? Thank you.

Niki January 04 2010 8:57 PM

I'm very confused. I owe $36,000 on my credit cards and my husband lost his job back in September. I only bring home $2400 a month and we are now $1046 in the red very month when I fill out our budget. Our credit card minimum payments are $835 per month. Since we are in the hole every month, I can't pay them anything. I'm afraid they will sue me and I don't know what to do. My husband has tried for months to find work but he can't. What do I do? Can they sue me? Can I lose my job if they sue me? Thanks.

Lanette January 04 2010 4:39 PM

I have been using this method for years. It is the ONLY way to get out of debt quickly short of winning the lotto. This time of the year is the best because you can create your plan wihtout thinking about your tax return. When the tax return arrives...ATTACK another bill, you will be suprised at how liberating it feels to eliminate an entire bill in a blink of an eye. They key of this plan is to be dedicated AND if your in a family ensure that EVERYONE is on board and is participating. I would make a white board with the "Target Bill" displaying its balance. It sits in the living room or the kitchen so the entire family understands why we cant go to McDonalds. Its fun, it educates your children and gets them excited about being responsible. So many life lessons can be learned through fiscal responsibility, I just wish our Congress would understand that.

Joe January 03 2010 4:37 PM

I want to start this plan but what do I do if cards have been turned over to collections...do I pay bit by bit to them directly? They keep asking for large down payments before I start paying what I can afford on a monthly basis. We have a lot of debt and don't want to do bankruptcy but we are so scared that we may make stupid decisions. Where do we start?

PS December 30 2009 2:50 PM

My husband & I are following Dave's plan & are just now beginning to see a small difference. We started with $122,000 cc & student loan debt. We have really cut out things, sold most of our furniture & household items, moved in with one of our children, we have worked on the house so that we will be putting it on the market soon & my husband went back to work after 6 years of retirement. We have worked with all our creditors to lower our payments. Today we paid off our 1st snowball. It feels so good. We have not had an easy time of it but it's all been worth it. We plan to continue budgeting & snowballing for many years but look forward to the day when we can say we're debt free.

Susan December 29 2009 6:48 PM

My husband and I just started the debt snowball. For years I have tried to find a way to get out of debt without negatively affecting my credit score. However, my debt is too overwhelming and so no matter how many extra jobs we take, it would still take 10 years to get out of debt. At age 35 and young kids at home, we finally came to the realization that if we want to get on the right track learning not to use credit, get out of debt and teach our children good spending habits, we needed to just take the hit on our credit score. When you think of the debt snowball in the whole context of Dave's steps to financial freedom, it doesn't matter what your credit score is because you will not need credit to purchase the items you want/need and that is such a freeing feeling to me. Debt is bondage and the Lord paid a great price to take us out of bondage, I should run away from the things that put me right back into bondage! Anyway, thanks to everyone for all of the great encouragement and information. Hopefully will be debt free (except for the house) in 3 years! God Bless!

Lisa December 29 2009 5:12 PM

what about debt consolidation programs? arent those supposed to help with eliminating some credit card debt?

steana December 29 2009 3:20 PM

Suzie, The first step is to STOP borrowing money. If you make that decision you won't be able to take on anymore debt. Also, what about the spit shake?! You have to balance out the budget every month and tell your money where to go. ;) Good luck! You can do it!

Laura December 29 2009 11:42 AM

It's no easy task to get rid of debt and sometimes feels like and endless quest that can really take a toll on your life. I think it's important to note that there are some really creative and unique ways to get rid of your debt these days besides consolidation. I built up a credit card balance of nearly $5000 after college with no real strategy on how to pay it off. I carried this balance for several years just barely covering my monthly finance charges. I was planning my wedding at the time when my fiance came across a website that allowed you to create a registry of your unpaid bills and send it to friends or family for big occassions like birthdays or Christmas. It was pretty easy to use, we just added the info about our bills and sent the registry to everyone that we invited to our wedding. For us it was the perfect answer at the time as we were planning on registering at a department store for our wedding gifts. We just figured that we would rather be debt free when we started our lives together vs. having some extra kitchen gadgets and china. We cut our debt in half within a month and are now just a couple weeks away from finally paying it all off. It may not be for everybody but it worked great for us and is just one example of some of the creative ideas out there today. The site is Billpayregistry (www.billpayregistry.com) if you're interested. Good luck! Oh, the site was free too. -Jessica B.

Jessica B. December 28 2009 5:07 PM

I can't seem to get past the 2nd baby step. We had paid almost $12,000 of our debt before Christmas, we budgeted and had saved $1,400 for Christmas but spent more than that and increased the debt instead of reducing it. I am so frustrated. I feel like I need to go back to step 1 since the emergency fund somehow disappeared over the course of the year. Any suggestions??

suziequezie December 28 2009 3:43 PM

To all of you who have made it to debt free status, I salute you! GREAT JOB! To those of you still stuggling, DO NOT GIVE UP!! It will come, but only if you don't give up. You have to get focused, very focused, which means you will have to sacrifice something. Dave's plan works, it really works. I know this because I became debt free in October! I paid off $28,551 in ten months. I found the Total Money Makeover book by accident while surfing around in Amazon.com in December 2008. I took a chance and purchased it. Once I started reading, I couldn't stop; I finished the book in about three days. I was so pumped up and excited, because now I had a specific plan I could understand and follow. On January 3, 2009, I started my debt snowball. I paid off three credit cards and a car (which by the way drives extra nice since its paid for). I do have a great income (total of about $133,000 including military retirement, VA benefits, and full time job), but I've made a sacrifice to make that great salary. I get up at 3:00a.m. every morning; I drive 22 miles to the commuter train station, board a train for a 75-90 minute ride, get off the train and catch a bus to my office. Total commute time is approximately 2-2.5 hours each way, which means I spend about 4.5-5 hours each day just commuting. It "ain't" easy, but worth it. Now I'm concentrating on fully funding my emergency fund, starting to invest again, and paying off my mortgage. Its such a great feeling to not have any debt. It can be done, you just to find out what works best for you (i.e. what can you do to generate more income, what can you do without, etc.) God Bless You All! I'M DEBT FREE!!! WEE HAA!

Dee December 28 2009 7:08 AM

What I have been doing the last year or so was to keep calling and calling your creditors. Keep communicating whenever you have a change in income or life changing event. For example, when my income stopped and I had to take on 2 jobs, I got my student loans on forbearance and I got two months of my auto loan deferred. When I got income again, I took advantage of the reduction in expenses to pay off 2 smaller debts. I have $50k in credit card debt, but I managed to pay down about $3,000 this year in spite of a 50% reduction in income since 2007. Every time I pay off my debts, I feel motivated to work harder in my two jobs. When I feel frustrated or depressed, I have a running group which doesn't cost me any money and gets me focused and healthy. I volunteered my time to build up my network which has helped me to get a new job in a more stable industry while giving me the social support I needed to get through my crisis.

espresso1980 December 28 2009 3:05 AM

My son received dave ramseys book for a graduation present in may. I ended up reading it 3 times. I started the snowball pay down and in just 7 months i've paid of two cars and 3 medical bills. Right now all we have left is the house. I cant believe it is if u set your mind to it. I have been paying little payments for 2 years Thanks for the book it has been life changing.

Lane December 27 2009 7:36 PM

My husband and I were about $35,000 (most in credit card debt) in debt at the beginning of Jan. 09. We were to the point that we couldn't make it anymore and were about to go under. It took us to the point where we at our lowest and we realized what we had done wrong and all the foolish decisions we had made. We knew there was nothing else we could do, so we started praying. I began praying every day and doing it fervently. I told the Lord that we couldn't pay off all this debt on our own but we don't know where to begin to pay it off. First, the Lord sent us a $3,000 check in the mail from someone that said they felt lead to send this money to us. We socked it right on a credit card debt and nearly paid it off with this check. We had about $800 left to pay on it. Getting that $3,000 check started the ball rolling on getting us debt free. The Lord answered our prayers and began working on us. We had to come to the point that we realized where we went wrong and make a fresh committment to stay away from credit cards and pay everything with cash. If we can't pay it with cash then we don't buy it. I am happy to report that the Lord has so graciously paid of over $22,000 of our debt in about 10 months from the time we started praying and committing every extra dollar to our debts to pay them off. We still lack about $13,000 and we will be debt free. We are still praying and asking the Lord for his help on that too. He is the miracle worker and we still serve the same God that David, Moses, Noah and Abraham served. He's a God that is the same yesterday today and forever. We can trust Him and believe in Him that He will do as he promised. The Lord once told His diciples "don't doubt in your mind, only believe". Tithing is our first priority.. when we make God a priority.. He will bless you for it. He always blesses us for doing the right thing. The same thing a parent does for his/her child. We always reward our children when they do the right thing but we never reward them for their disobedience.

thankful December 27 2009 2:56 PM

Thought a little humor in order. A former co-worker looked at the bank statement and surprised to see an over-draft. Asking his wife how could this happen, she replied " We can't be out of money, I still have checks". Shortly after our marriage, I looked at her check book and statements and discovered a bank error to her detriment of $200. I asked when was the last time she reconciled the statement. She replied "I used to, but it always came out right, so I quit".

Earl Vandigrifft December 27 2009 1:23 PM

I just bought 3 books on special sale, TMMO, Revisited, Enough was free, hows that for a start? I have 3 children 32,23,22. So the books will be divided amongst them after I read through them. I am hoping to lose some debt myself and save the emergency money. I had already gone bankrupt 10yrs ago on hospital bills $4000.00 and a custody battle my ex made me go through that cost over $15,000.00! My BF lost his house due to his wife passing away and the mortgage co. NOT working w/us 3yrs ago. I had $8oo.00 saved but used it for car repairs. Now I have about $2000.00 in debt.W/ credit cards and an electric bill. It's not much but I am disabled and get a lousy check once a month. I also had to borrow $1500.00 for surgery of the spine that is not fully covered on Gov. Ins. that I need on Jan 18th 2010.I am still going to do this and I give to a soldier once a month for my tithe and an animal shelter. Also give to those less fortunate hand me downs from my kids.I will make this work! Now if I can find a lawyer that will work w/me to get my retirement money that my ex stole from me from his work I would be in better shape!Wish me luck and the best of luck to all! Dave your the best!

q2u2 December 24 2009 11:12 AM

My husband was laid off from his job in November 08 so we had been trying to live off my 30k income and used credit cards for the extra. We didn't down size or cut unnecessary expenses. We had 30k in cc, 10k on a car & 45k in student loans, talk about OVERWHELMING, especially for a newly married couple in our 20's!! We came across the Total Money Makeover and immediately got excited about the principles. We decided to make some major changes in our lifestyle. We moved into a tiny 1-bedroom apartment, we made a list of everything we could possibly sell and started taking pics and posting them on craig's list. We also began tithing religiously. My Husband got a job in May and I received a promtion in June. So far we have paid off ALL of our credit card debt (30k) as of last week, and are so excited to put those payments towards our car!!!! The math almost doesn't work out, with how much we have paid off and the income we made, God is good! I would encourage anyone looking to start this plan, to JUST DO IT! And do it with focused intensity! We still have more than half way to go with our debt snowball, but we know one day we will be DEBT FREE!!

Emily K December 22 2009 1:28 PM

BRIAN:you won't get charged 12.99% per month interest, it will be 12.99 per year. Stick to the snowball, you can do it! EVERYBODY: Some on here are asking how long the snowball plan will take... check out this helpful calculator tool from Crown Financial Ministries: http://www.crown.org/Tools/Calculators/Debt_AcceleratedPayoff.asp On this site, you list your debts - lowest balance to highest balance - then at the bottom, enter any extra you can afford to throw in each month. Be sure to click "Calculate Results." This was super-motivating for me. It shows exactly how quickly you can pay everything off, and even prints a payment schedule. Dave Ramsey's stuff fits very nicely together with Crown Ministries stuff. Both are offering incredible programs that set people free from the slavery of debt.

Jeremy December 19 2009 7:44 PM

Although I agree with Dave’s principles on the snow ball debt, I still didn’t get that revelation. I was still paying the debts off the best I can. I finally got the revelation and as Dave says it’s about motivation. Personal finance is 20% head knowledge and 80% behavior. When you start knocking off the easier debts, you will see results and you will stay motivated to dump your debt. It is that simple, and it is true when we see results it motivates us to go deeper and do more.

Abraham Silcott December 19 2009 3:19 AM

The strategy that got me moving down this path to debt free was to open a new savings account at a different credit union. I now deposit my snowball money here, as well as the income from the side job. This forces us to live on a smaller budget and keeps the money seperate. This CU then let me restructure my debt by replacing credit card balances with a fixed loan. When I have extra money I can log in and transfer whatever I have to the smallest balance. If you're wondering where the extra money can come from, just look at current spending. The cell phone, cable TV, landscaper, etc aren't necessary to keeping the house and feeding the family. Look to these first and see if you can find the seed money to get the snowball started. I'm on track to be debt free in the next 6 years (house included!)

Steve December 18 2009 3:16 PM

My wife and I were $31,500 in debt (with car loans, line of credit etc). We were "sick and tired of being sick and tired". While listening to Dave Ramsey (in Canada) we got serious about becomming debt free. Along with my full time job I also got 2 part-time jobs and my wife (with her full-time job) got another part time job. With a little sweat and tears, we were debt free in 18 months. Since being debt free (this past year), we've been on 2 trips (one to Mexico and a Cruise in January) and doing some renovations to our house (approximately $23,000) all paid in cash. It is truly amazing to my wife and I that we have a lot more money then we thought......actually we knew we had money but the bank was taking most of it in interest payments. My wife and I didn't sort-of-give-it-a-try. We put your head down, get mad and get serious. I'm living proof it can be done...and it feels great. My wife and I are 33 and 32 years old with no credit card debt, no home equity loan, no student loan and no car loan. The next thing were tackling is our house which WILL be paid off in 5 years. Thanks Dave for all your incouragement and knowledge. Your fan in Canada...

Excited to be debt free December 17 2009 12:31 PM

I read The Total Money Makeover 15 months ago. At the time, I was in 45,000 worth of debt and making 45,000 a year. I would like to say that I have done a phenominal job at knocking out my debt, but the truth is, of the 7 debts I started with, I have only paid off 3. On the other hand, my debt has dropped from 45k to 30k. Part of the slow up was that I took a trip home this past summer (home is Hawaii, I am currently working in Texas) and got married. To my credit, I budgeted and saved up for both and paid cash for all of it. To my discouragement, it sidetracked me from meeting debt goals. All that said, I believe the Total Money Makeover works ... is working. I expect to be focused explicitly on my debt now, and am planning (not hoping ... I am working with a purpose here) to be clear of the remaining amount by April of 2011.

Trey December 15 2009 6:42 PM

I feel like i am at the bottom, i have 36K in CC debet, 31K in car debt and 185K in my house. I have had 2 credit cards turn me over to collections, i have tried to work out payments they will not work with me on that. I have went to see a bankruptcy lawyer but i really do not want to go that route. I have a meeting with a Dave Ramsey financial coach, but as of right now i feel there is nothing i can do. my husband works nights i work days so a second job can not happen because of the kids..

melissa December 15 2009 6:03 PM

I don't know how to get started on the plan when most of our fixed expenses alone are more than my husband brings home a month ? Any advice.

Jean December 15 2009 11:41 AM

what do you do when your wife is not on the same page as you are? or willing to try.

Dave December 14 2009 10:11 AM

I just recently discovered this web site, and for the first time in months, I feel some hope. My husband and I are self employed, we are in the Housing buisnes, and we all know what thats been like. For 22 years, Thelast 3 years have been tough, we have seen lean years before, but never like this. Between our buisness, and personal, we are in debt 85,ooo dollars. We made alot of mistakes. Our savings are gone, investments shot, retirement down 45% Its been making us sick, literally. Now after going through this web site and reading you alls situation, I dont feel so alone, and feel hope and know that there is a way. Thank you Dave Rasmey.

Debra Haske December 13 2009 7:49 AM

Hello, everyone. I wanted to encourage all of you struggling with credit Card debt. My wife and I are newly marriage just over a year I have just graduated College. We are blessed to both be working in today’s economy however, Dave's system work because it follows the guidelines of Scripture. When we started marriage we had a total of 32k in debt (Car, loans est.) However with prayer and hard work we have been able to live like no one else now so we can live like no one else later. We paid off right around 15k so far in a little over a year. However, I feel like some may say well you must make a lot of money? No, we make a average income of right near 50k but we live off of 60% saving close to 40% it works. Remember, PRAY and WORK HARD. I am only going to be 25 this week it really works. Thanks, for your time & Thanks God for giving Dave the knowledge to help us.

Ryan December 12 2009 9:01 PM

Wow! We just graduated from FPU one week ago. We dumped $40K in debt in 40 days. God is good! We are really sticking to the plan and sharing it with others. Our marriage has improved. We really like working together on being debt free!

Cynthia December 12 2009 4:54 PM

just kicked another card payment out of my wallet now i got a target visa in my sights

shane from atlanta December 12 2009 9:30 AM

Sadly, whenever I have tried to do step one: set up an emergency fund, we suffer immediate money needs (car needs repair, unexpected bill, etc.). We were really messed up by the bank on our house loan and despite the news that interest rates are down, we are paying 8% interest on our mortgage loan. Very little left for the credit card debt which is killing us. And if you have noticed, all the card companies are now sending out letters saying they have increased their rates (really really high). So I closed all our cards but have no emergency funds for back-up. Now that is scary. We have five little children and over $13,000 in debt. :(

Kay December 11 2009 9:42 AM

Joseph (December 3, 2009): I have two jobs currently and I still do not eat at fast food restaurants. Go grocery shopping for cheap, easy to prepare items (soups, sandwiches, etc.) and take one night a week to package and prepare your meals for the entire upcoming week. Then when you leave the house in the morning all you have to do is grab a bag and go. Much cheaper than eating out all day. Also, if you can't afford the pets, give them to someone who might be better able to take care of them. Shelters are overrun now with animals because of the overpopulation problem, but with it being close to the holidays, someone may want to adopt them for a child, etc. Also, stop using the credit cards! The only way to get out of debt will be to stop using plastic and use cash. If you don't have the money to pay for it, don't buy it. This philosophy has helped me to pay off $10,000 in about 9 months, on a $40,000 income. Good luck to you!

Kristen December 10 2009 5:49 PM

We are at the step where we are resolving debt on our credit report. Some have been written off/charged off? Should we negotiate or simply pay it all?

Liz December 10 2009 12:17 PM

HEY I REALLY LIKE THIS PLAN...AND MY HUSBAND AND I REALLY IN THIS TOGETHER ON WANTING TO GET OUT OF DEBT AND HAVE FINANCIAL FREEDOM...BUT DOES THIS STILL WORK EVEN IF I CAN NOT AFFORD TO PAY THE REGULAR PAYMENTS??? I MEAN I BEEN PAYING ONE THING OFF AT A TIME...AND THATS IT...THATS ALL I AM ABLE TO DO AND FEEL LIKE I AM GETTING NO WHERE. THE LATE FEES ARE DOUBLING MY DEBT. I HAV NOT BEEN ABLE TO MAKE PAYMENTS ON MY DEBT IN A YEAR DUE TO BEING UNEMPLOYEED.IS THERE HOPE OR SHOULD I JUST FILE BANKRUPCY? I AM JUST 22 AND HAVE TWO CHILDREN AND HUSBAND IN MILITARY, WE BOTH ARE IN SCHOOL? I JUST FEEL HOPELESS

Amber December 10 2009 10:01 AM

We are in debt over our heads. About 60,000 in cc debt. And a $970 per month house payment. After we pay off all the credit cards we hove no money left over for food. I have been looking for a second job since March. In Michigan there are none. I have even applied at McDonald's and Taco bell. Greenpath told us to file bankrupsy. What do we do. No one will help us.

G December 09 2009 7:54 AM

the dave ramsey plan works! and it has helped our marriage so much. we started off with over $133,000 in debt. Cars, medical bills, and student loans (one $600 CC). for those of you saying that there isn't enough flakes to make a snowball, start off by creating a monthly budget. you would be surprised were you can find money there. we also made some huge changes in our lives, we moved into an apartment (with our 2 kiddos!), sold our cars, and are sticking to the budget like crazy!!! the envelope system has helped with all the little spending that adds up. we have paid off around $30,000 since Feb 2009. and my husband got a new job with a HUGE raise! we still have a long way to go, but now we have hope!!! good luck to all you! try it for a couple of months...see what happens....

jandkmomma December 08 2009 11:41 PM

Scott, Trust. Keep plugging away at work, and hopefully your wife will pick up a job in the near future. No doubt you've already read about other ways you can build positive cash flow (selling things you no longer use and CUTTING OUT unnecessary expenses). I would encourage you to take a good hard look at those unnecessary expenses and get on the same page as your wife regarding areas you will both target in cutting out. Hold each other accountable (gently) and hold yourself accountable most importantly. My wife and I have started our debt snowball recently and we have 20K in a car loan and 30K in student loans (fortunately no credit cards). We will knock out the car loan first and then tackle the student loans, and we have sat down to develop a plan of attack. It has really united us in our finances. And to EVERYONE, although getting rid of debt is important and exciting, I would to emphasize the value of TITHING. Regardless of how we handle our finances, we need to always be sure we are giving our first fruits to the Lord. He clearly commands it in his Word and he is a jealous God. Some people will argue that they can't afford it, but I will argue with anyone that we really can't afford not to. His will is infinitely more valuable than mine.

T December 08 2009 12:44 PM

My husband & I have been using this for about 8 months, although I don't exactly snowball it. I have certain amounts I pay on each of 3 cards (equal to 3-4x min pymt) as well as a personal loan and a LOC. I made a Bad Dedt tracker sheet on Excel to help encourage us. We have it all listed out, payments, interest and balances. Thank God 2 of the items are 0% int and 2 are fixed at 5%. Only 1 has a yucky rate of 12%. It definitely encourages us to actually SEE the progress and focus more on how far we've come instead of how much more we have to go. We have about 27,000 more to go at about 1,300 mo. We should have it gone in 20mo or less, then on to pay off the camper earlier than agreed.

Stacy December 07 2009 6:33 PM

I have being listening to your radio program and hope to buy the package one day, as soon as I get a job. I loss my job in June and have not found a job as yet. the financial world is crashing on me and my family. thanks for the radio program which I listen to.

Alan Williams December 07 2009 3:21 PM

Joseph, Even though you may not have time to cook there are certainly options for you so you don't have to spend that income on dining out. Invest in a crock pot. Put in some cheap cut of meat, can of cream of whatever soup, water and some veggies. Place pot on low and dinner is ready in 6-8 hours. Make sandwhiches and take fruit with you for lunches. Do you have a cable package you can cut off or down-size? Landline no longer needed? Low deductibles on car insurance, homeowners, etc? Raise the deductibles and your payments get lowered. Just be sure not to be unreasonable when changing these. Cells phones- cut back your minutes (if you are working all the time, you probably arent talking on the phone that much anyway). Turn your heat down in the winter (wear a sweater), AC up in the summer to cut energy costs. You need to set a budget and see where you can save. I'm sure there are areas that you can make a few cut backs on. The best advice is to work TOGETHER on this. Best of luck.

Ellen December 07 2009 10:58 AM

Joseph, find a way to start shopping and making your own lunches and dinners. I work three jobs right now and in the past I let that be an excuse for eating out. I had always considered it a need or considered myself a "conservative" spender when it came to eating out but when I finally tallied up my actual monthly expense in this area I realized just how a little here and a little there add up. Even if I'm only saving $1.50 by making my own coffee in the morning I consider that $1.50 closer to my goal. I also usually prepare a two large dishes on Sunday night and then pack them for lunch and dinner all week. The money I don't spend I put towards paying off my loans!

Misty December 06 2009 9:56 AM

My wife and I are starting FPU Jan. 13. We have about 40K in credit card debt, 10K in auto loan, 30K in student loans, and about 20K in a time share vondo for a total of 100K in debt. Right now I am making about 40K between two jobs and my wife is looking for a job. I just can't see how we can possibly do this, but I want to believe. PLEASE! Someone give me some words of encouragement!!

Scott December 04 2009 8:39 PM

I am trying to get out of debt. Circumstances came up and that I had to move to an apartment. I pay 475 a month in rent and have to pay that bi weekly. Along with other bills i have to pay. I end up being broke. I have a big credit card bill to pay but yet I can't find the money to pay it off or do the snowball. I only work part time and I am on food stamps so I can't make much to get a second part time job. Or I lose the benefits. I am stuck between a rock and a hard place.

Jonathan December 04 2009 11:47 AM

I am in somewhat the same boat as Mike posted on Nov. 3rd. My wife and I are in around $40.000 credit card debt and believe that is the problem to getting us back on track. We don't have extra income and pay minimum on the credit cards. We don't make enough money to pay extra or save. I have 2 jobs and so does my wife. Of course our expenses are high, we don't see each other or have time to cook at home, so eating out is a must. We have nothing to sell and can't refinance the house or vehicle. Our goal is to get out of our condo and get a real home along with getting rid of the credit card debt and pay cash for things, instead of putting it on the credit card. Also, I am just turning 30 and my wife will be 33, we have 5 animals and really want kids, but we will not set ourselves up for failure! We are considering consolidating, but don't trust any companies out there! If anyone can shed some light, I would be very interested.

Joseph December 03 2009 11:23 PM

What do I do now that my 0% APR credit card deal is coming to an end and I will start to get charged 12.99% per month on 20k. Can't find any other deals on credit cards to transfer over to because they charge 3-5% transfer fees. Help!!!

Brian December 03 2009 5:28 PM

So far we have paid of just short of half our debt with this method. We're on track to being debt free by 10/2010!!

Annie December 02 2009 4:58 PM

I am at witts end and came across this after hearing a radio spot-snowball plan sounds great but have a Q for anyone who may have been here ... I have a VERY high interest loan, $126 of my $175 payment each month goes to interest. I only have two credit cards with outstanding balances on them. Once they are paid off and I apply those minimum monthly payments toward the loan it will only add $25 more per month to that payment. Does anyone have ANY suggestions? The loan company closed all offices this year and is not signing new loans or refinancing old ones. They will not budge on the interest rate. It is a revolving loan account but they closed it a long time ago due to non-pay when I was unemployed. Someone told me to ask them to "term it out" but they will not do that either. Is there any hope of EVER paying this off? Single mom on VERY tight budget.

K-Lynne December 02 2009 12:56 PM

Anita - save up %20 down and get a good conventional 15 year mortgage. Dave has no problems with you buying a house on a 15 year term... But - kill your debt first! It's amazing at how liberating that is!

S December 01 2009 1:00 AM

I am currently giving to three separate charities. Should I stop this activity until I get my debt paid off?

Emily November 30 2009 5:04 PM

Frances, that is sooo important. The Bible has many examples in which God shows us that those who are faithfull and obeident in the little things will receive bigger ones. The tithe is about obedience. If we are not obedient and manage the little he has given us now the right way, we can't expect Him to give us bigger things later. i am starting the program myself and I plan to stick with it. I think a Bible based plan makes more sense to me tha one based on the "wise world".

Mlepage November 30 2009 3:55 PM

My husband came across this website and he is sold. I'm skeptical. It does make sense ofcourse, but how can we committ to a budget when his (husbands) paychecks fluctuate so much? I never know what to expect each payday. And having a child in elementary school, there are ALWAYS unexpected costs popping up for school functions or projects or fieldtrips. I'm SO frustrated and sick to my stomach thinking of the amount of debt we keep piling up, and hate hearing the phone ring. It's always the bill collectors. Why answer them? I have no money to send them, and I have no idea when I will.

Kim November 30 2009 2:50 PM

I need to buy a house. How can this fit into the no debt plan?

anita November 28 2009 10:27 AM

Just purchased Dave's Personal Finance Software. We're hoping to get organized and start paying down our debt on January 1. :-)

Rick November 23 2009 1:53 PM

I tried snowballing but not until I started tithing did I began to eliminate my debt.

Frances November 23 2009 12:30 AM

I also found some solace in DA (Debtors Annyomous)(sp?)It helps me get to the core of why we debt and helps keep us on the road to solvency..there are online and phone meetings if you are unable to find one locally to attend in person..very helpful:) I have about 80k in credit card debt,plus another 250k in secured debt, but I WILL use the snowball method..it makes the most sense..god bless and good luck to all of you, Krissy

krissy November 22 2009 12:15 PM

I think if you are having a hard time managing all the debt then take the lowest debt first and pay it down. If you have to skip payments then do it on credit cards because they aren't attached to anything you can lose. The other thing is even though they scare you about paying them. They want to settle after a few months. They usually have racked up your bill to twice as much but are willing to settle for cents on the dollar so I say pay off what you can and settle the rest. It's stupid that they won't work with you before there is a problem but don't get discouraged. I plan on paying all my debts but I am having to do it one at a time.

Uptoneckindebt November 20 2009 1:18 PM

I am reading, and will give it a try, I am not able to make minimum payment anymore and cut all the loose ends, but I will start the program this month, by following the advice to pay at least $10.00 to every one and will be able to clear at least one card a monthIt.Wish me luck and thanks for all of your comments. It gave me an insight that I do not need bankruptcy to take care of my own mistakes and created mess. $130,000 in debt.

Yenisey November 19 2009 6:30 AM

I am SO willing to do this!!! I am also so TERRIFIED and DEPRESSED!!!!! Am working on selling some items that I do not use...I just need some encouragement. I do believe Dave's method makes sense though:)

krissy November 18 2009 2:20 PM

My wife and I read the TMMO in Nov 07. In Feb 09 (14 Months) we had paid off, $12,000 in debt off, paid cash for our wedding, cash for our honeymoon AND in Jan 09 I was laid off from my flying job. Still made it work!!!

Mike November 17 2009 11:04 PM

Anybody have some advice for me? One of our department store credit cards is at 28% and we called to see about getting the percentage rate lowered because our payment is so high. They said they'll consider it if we make our current payments on time for 7 months. If I was comfortable making the payments for the next seven months I wouldn't be trying to lower the rate!! Any advice on how to push them to lower it now?

Eric November 17 2009 6:09 PM

Today is my start day. I just read all the comments on here and I am gonna give it a try. Wish me luck!

Lynette November 17 2009 1:20 PM

The snowball method has been working for me. Murphy is always knocking at my door but I am not giving up. I still have $4,000.00 left to go.

Rosalinda November 17 2009 7:53 AM

I used this plan and paid off 2 credit cards for a total of $3,800 and my vehicle at $3,500 for a grand sum of $7,300 in 1 yr on an income of $40,000. Nothing left but my house. It works you just have to keep at it. Thanks for focusing my mind Dave.

JonP November 17 2009 1:23 AM

Doug - if you don't mind me asking, how long did it take to pay off the 20K in debt? i feel like this plan would work - just wondering what kind of timeline i'm looking at.

sarah November 16 2009 3:31 PM

This is a paradigm shift in the way you think about money. It works. I started with 20K in debt, I am down to just the car, 7500, which I will write a check for at the beginning of the month and pay it off, next the second mortgage. Start following this and it feels like money is pouring in from everywhere!!

Doug November 13 2009 6:35 PM

Mike, I've had all of my credit cards go to collection with my income dropping to 1/3 of what it was just a few years ago, but the nice thing is that some of them have stopped charging interest because I've been faithful in making payments every month. Stick to the snowball. When you get extra cash, consider if you have enough to pay off an entire balance. If not, do what I did and call the creditor and tell them you can't pay it all, and what are they willing to settle for. I've had one account that was charging me 30% interest waive $1,000 off the balance and settle. After paying 30% interest, I don't even feel guilty about that. So keep at it. I'm getting there, and so will you.

T November 11 2009 11:02 PM

our family had a year of living on credit cards. We know where we went wrong and take full responsibility where we are, We have changed spending habits etc but we are 100,000 in debt to cc companies. We feel like we are too far gone! What do we do????

too far gone??? November 11 2009 10:37 AM

been at this for a year, a few, well a lot of stumbles, but the debt is still decreasing, and we will keep at it. Just keep working the plan, persistence is golden.

hutdwellers November 11 2009 4:01 AM

dave talks about having one payment after all your debt is paid off. but what about the car insurance, electric bill, gas bill, water bill, phone bill, cell phone bill, property tax bill, landscaper, alarm company, sewer bill, etc. how does he address these reoccurring bills?

frank p November 09 2009 11:58 PM

Mike, Could you work a bit extra for a few weeks? Could you sell some stuff you have? Is there an option to refinance your motgage? I would start there.

Charlie November 08 2009 5:03 PM

When you don't have enough to make all your minimum payments, pay what you can on each one. There is a form to help figure that, called a pro rata (or "fair share") form. I imagine you can find it on this website somewhere. Even if the numbers you come up with as your payments for each debt is below the actual minimum payment, pay it anyway. You might get tons of calls from collectors, but as long as they are getting money from you, they aren't very likely to sue you, and they WILL keep cashing the checks, even if they say they won't or that the amount you sent isn't good enough. Dave said he had one client who got thru their debt snowball that way for literally years by paying only $2 per month on something, and paying it off when they could. Put your housing, food, clothing, and transportation costs FIRST, no matter what the creditors say. They are trained to get a rise out of you to get their money, so just ignore their rude (often illegal) tactics and do what you have to do to pay for necessities, THEN pay your debts.

Katie November 08 2009 11:52 AM

My wife and I are in the throws of this now - but our challenge is minimum payments on credit cards that continue to escalate their interest rates. Some are as high as 30% now but originally were 10% or 12%. I desperately want to avoid bankruptcy. I don't personally believe it as an option and don't see it as God honoring. But my pay check is consumed simply with meeting the minimums and making the house payment. When there isn't fluff or excess in your budget, what then??

Mike November 03 2009 11:57 AM

I am using the snowball method and the progress I'm making is too slow. I wish my snowball would roll along faster!! I just need to stay encouraged and not loose sight of what my plan is. Don't give up, I know how you feel.

ann marie schulz November 02 2009 2:22 PM

I have been struggling with a credit card debt, and two loans for some time now. I am always worried about the interest rate on my credit card, and was paying all I can to pay that all and see it come down. On Sunday 01/11/2009 I checked my emails and had one from Dave Ramsey with this snowball debt principle. I always heard that if you pay off your smallest debt first, that will encourage you and then pay on the next smallest one. I could have been out of debt a long time ago if I was doing that and stuck to it. I am seriously going to do just that and watch my debts come down. Thank God for you Dave you are God sent.

Abraham Silcott November 01 2009 1:50 AM

My daughter,Kathy, is revamping her finances, thanks to you. She shared with her son and they were shopping in the mall and she started looking in the purse store window and her son (13) came up behind her and repeated, "Alpo, mom, Alpo"> and she immediately changed her mind. Hooray for Dave!!!

Barbara Cole October 31 2009 10:54 AM

This works! I paid off about $12K using this method. The key is to make sure you add to the payment of the next card when you pay one off. The other key is to not use the cards! You have to be disciplined.

Lesa October 31 2009 9:23 AM

I have made it to debt free. But the spending thing is still a work in progress. My Emergency fund was wiped out this year by car repairs. 2010 is a new year, a new decade and I will get back in budget!

sandy October 30 2009 9:58 PM

I have worked off multiple credit cards, car loans, student loans, etc., using the snowball plan. I hate budgeting and have always been terrible at it, but by sticking to the snowball plan, it was easy to wipe out debt I thought I would have forever! Just stay focused and throw everything you can find at that debt, even the smallest amount of money will help! Don't give up!

landermom October 30 2009 1:11 PM

@D: to paraphrase a certain short, green philosopher: "There is no try, only do." Or, like a certain sports apparel company says, "Just do it". If it's not working for you, it's because you aren't following the program--you aren't changing your behaviour patterns. Think about that...

Darrell October 26 2009 7:20 PM

Try harder, D.

biohazardpc October 23 2009 9:10 AM

I understand that part but if everyone is wanting money from you now or they are turning you into collections then what....???

andrea October 17 2009 9:28 PM

Tried this multiple times...why won't it work for me??

D September 29 2009 9:16 PM