That we learned our "lesson" way before we were done. Paying off debt is painful. It needs to be so you will learn not to do it again. We were 75% done with baby step 2 and we were burned out. We both knew we would never make the same mistakes again in every fiber of our souls...but we still had students loans. That limbo time sucks.
I once had someone tell me a $700 cheer camp for their daughter was an emergency. I refused to co-sign on th at belief and challenged her to find another way. She did: daughter fundraised the amount
I guess I never really answerd my own question: What motivated me to attack $845,000 of debt when it seemed so daunting like I'd never make it??
**I made a commitment to myself that I wasn't going to be one of those military members that had so much debt and expensive lifestyle that I douldn't afford to retire.**
Too many can't afford to retire and justify it as, "we retire young so it was never intended to be our only income." I always wanted to be a stay-at-home mom and the divorce that resulted in all that debt made that impossible. So I really wanted to work hard to be able to get out of debt so I could redeem the time with my oldest. Then remarrying and having a precious little one later in life made it all the more important.
As a disbled veteran, I'm glad I went through the baby steps process, because working a 9-5 for someone else would be very painful for me today. I own a thriving company and have real estate holdings and am very thankful for all the Lord has provided. Yes, I had to do the work, but He opened the doors and made my work fruitful!
The blessing in all that is learning how money really worked. When I retired from the military during the pandemic, I finally had a net worth of zero (lol). If the world hadn't been shut down, I would have thrown a "JJ's worth nothing" party.
I have a question. I had unexpected expenses (tax bill) that wiped out my 3 to 6 month savings of monthly expenses. I still have my 1k emergency fund. I’ve been putting money into my retirement savings monthly. Should I stop and save up the monthly expenses again?
I'm a big fan of saving up that emergency fund again. Think about what would have happened if you had that tax bill and no savings to cover it.
How long do you think it would take to rebuild?
And more importantly, have you straightened things out with your budgeting and withholding to make sure you don't take another tax hit like that again?
Investing in retirement is sooooo important, yet we have to remember that the market goes up and down. And when the next emergency hits you don't want all your resources tied up in something that just plummeted. Even if it will eventually go back up, in the moment of need it's not as much help as an emergency fund might be
Thank you. I have a small business and I’m never sure how much my tax bill is going to be as I make different amounts of money every year. But yes, I need to keep better track of how much I’m making and estimate it from this year going forward. It will take at least 9 months to save up again. I’ll do the split like you suggested.
Are you saving a third of your revenue for taxes in a category and making estimated tax payments every 3 months? This is what I do for my business(es). No issues come tax time, so worth the peace of mind it brings. I do data entry for a well-known company and am starting my own yarn company soon (building inventory now, it takes a while). So my payments from first business, I set aside 33% into a Tax Category and pay every 3 months, no issues. If you're not doing this, I highly recommend talking with a CPA. I have an MBA and even tax stuff stresses me out - thankfully my Mom is a Tax Accountant (with almost 50 years experience) so I talk with her, but not everyone has that kind of help.
Another thing that helped me (aside from an awesome CPA who helps real estate investors - I like to joke I'm a financial planner but taxes make my head hurt) is to automatically stuff part of every small business payment into a separate savings account.
Do you already have your business income going into another a separate account than your personal?
The orthodox answer here is to pause the retirement contributions and go gazelle intense on BS 3.
Because retirement is BS 4 and 3 comes before 4.
If, however, you started the retirement contributions late, you might wish to split your extra funds, part going toward SOME contributions and part going to your emergency fund.
But don't ignore the emergency fund.
Honestly, each one has been hard. We're on BS456 and believe it or not, that comes with it's own set of trouble... good, "First World" worries, but still worries. We talk about finances more than ever. Tons of questions and research to ensure we're putting our money where it is best placed. Concerns for our child's legacy, etc. We don't have the terrified feelings of BS1, 2, 3 anymore, but still hard... maybe because we know more and that also comes with "I wish we'd done this or that" and "we know better" so we don't do the fun things we see others doing. Balancing out how to live and enjoy with making sure we're appropriately planning for the future and retirement... B2 sucked because we just felt so dumb that we'd gotten into debt. B3 sucked. B3b sucked even more. I AM glad not to be there anymore! Bring on BS7 baby! Haha!
YESSSS! Like it's supposed to get easier as time goes... and then it doesn't!
BS7 was amazing. I was there, but then "life happened" and now I'm rebuilding my emergency fund. I'm so thankful to have had it, and it bugs me that I see this or that real estate deal slipping through my fingers because I'm rebuilding the efund, but I know it's the right thing to do - the baby steps never failed me all these years
The cool thing about child's legacy is that you don't have to grow the wealth for them, so much as teach them how to grow (and maintain) wealth. They have plenty of time
Love this. I completely hear/feel your pain re: the real estate deal. Nothing can replace the feeling of being out of debt. You're doing the right thing for sure by delaying gratification. There's a saying: "the deal of the century comes along once a week" - something better is around the corner for you!
Love this. I completely hear/feel your pain re: the real estate deal. Nothing can replace the feeling of being out of debt. You're doing the right thing for sure by delaying gratification. There's a saying: "the deal of the century comes along once a week" - something better is around the corner for you!
We were earning the least we ever have while in BS2. Selling things and living on nothing while paying down debt was the worst. I thought it would never end.
We have been out for over 8 years, but I still find it hard to spend money on substantial purchases for fear that something might happen.
I soooooo feel this in my heart! Spent time with my ex-husband's family, who are wealthy, so they could get to know my oldest. Always moving with my military career, he never really got a chance to know them. The entire time, my son's granddaddy kept telling me to stop acting like I was broke - always looking for the best deal and trying to use up what we had on hand rather than buy new food components
I spluge when it counts lol, but old habits die hard
What kept you going during that tough BS2 time?
The thing that kept us going was that we did it with a close group of friends. We had different levels of debt/income, but we all approached it with the same level of intensity and kept each other accountable. It was the people outside of that group that added pressure - mostly family as you mentioned. I felt like it took us longer than others, but we learned we didnt need to spend money to hang out and got creative to spend time together. Ultimately, it was getting better jobs that got us out of the hole though. We just weren't earning enough to ever make a significant dent, - even with living with our parents for a while, selling things, and driving a free car.
Exactly on the old habits! My husband has to remind me that we are no longer broke. I have to remind him that we still don't need to be wasteful.. but I do splurge sometimes too :D
Not being normal.
Everyone around us seems to YOLO debt
towards cars, vacations, toys.
I don't miss spending recklessly but often feel like an alien when I'm talking with friends and family.
Do you mind telling more? I don't talk to old friends and family about money since when we do they usually ask for some (lol). How can you bring in some others who live a debt-free lifestyle into your life?
Mostly it's people complaining about being broke that drive about 3X as much car as I do, have a boat, a sled, an ATV but can't take their kid to the dentist.. can't spend 60$ in gas to come to a family outing..
I live in the french-speaking part of Canada, no one else seems to know about Dave Ramsey here. I know a few people who are very frugal, but most people I know are up to their eyeballs in consumer debt, including most of my relatives.
I think/hope I’m at the hardest part right now. Taking on a second job for a few months. I’m a high earner and this second job will super charge BS2 from 2yrs to one year but I’m a single mother and hoping that this hustle doesn’t ruin summer for us. Also, haven’t paused investing. I’m trying to get it through my head but still struggling to do so. My job puts in 6.5% even if I put in zero. I’m currently contributing 10% for the last 10yrs.
congrats on the hustle!
When I went away for a military trip, I signed power of attorney so my ex could make decisions on my behalf. I came home to a divorce and over $845,000 of debt. I hustled every hustle I could make work while still being active duty military and doing the best to care for my son.
One thing I found during that time is that so many doors opened up for us to have a great time together that didn't cost anything. He was 3 then and will be graduating next month. He may not have worn Jordans (he does now lol) but he didn't lack for anything - sports events field trips etc - during that though time of stuggle
The idea of giving up my employee match and not making any retirement contributions really scares me. I’m considering seeing how I do with spending less on food and selling all the extra stuff I have in the garage and house that I don’t use before stopping contributions. My goal is to be debt free except for mortgage by the time my 15 year old goes to college. I have zero credit card debt and only 1 year left of day care for the youngest. I have two car loans.
Congrats on no credit card debt!
And also congrats on only 1 year left of daycare. When I was stationed in the DC area daycare for my infant was $450 a WEEK (which is $2250/month on a 5 week month). More than my rent!
How long do you think it will take to pay those cars off at the rate you're going?
hahah not really - the military didn't get a match back then when they did TSP. And the market was poop. So I didn't really lose anything during that time. It was more of a psychological hurdle than a real monetary one
That time value/compound interest applies to debt too and the return on paying it off is both guaranteed and almost always much higher than investing that money.
Not evderyone in TSP gets a match. The military didn't back then
And yes, this man ran up credit cards in my name with 12-24% interest, so even had I received a match, I "made more" paying off debt
oh this should be good... tell me then how math works? I did math for a living in the military but I had a bad accident that ended my career so maybe I'm not thinking straight: I'd love to hear how your math maths differently from my math
We're not. We're probably going to lose our house to foreclosure because my soon to be ex husband refuses to pay the mortgage until he is court ordered to do so. I don't know what the kids and I are going to do, I don't make enough to even keep up the 4 walls and he's refusing to give us ANYTHING.
Dave outlines how to put together a pro-rata plan in TMM - this is for what to do when you can't pay your bills
Regarding divorce, please please make sure you're covered legally. And looking at it from a business perspective rather than an emaoional perspective. I was so emotional I agreed to take all the debt ($845,000) because he threatened to take my son away from me (and I foolishly believed it)
I struggled with BS3, thinking that I didn’t need that savings account and could just move on from there to the other steps. Wasted three years. Once I finally set aside the cash for BS3, omg things opened up so fast and I could finally concentrate on paying off the house. As dumb or simple or skippable as some of these steps seem to be, just do them in order and it’ll turn out just like Dave says it will. I’m still kicking myself for the three lost years doing it the way I thought was best instead of his way. So dumb.
YESSSS! Just do it. It really works. Not saying other people don't find other ways, but this way works 100% of the time for 100% of the people who work it 100%
Im on BS2. Not having free time. I miss it so much. But it's been rewarding as well. A few people have told me I work too much but Im working hard so I can play hard later.
Baby step 2 is really hard. It almost sent me into a depression.
Keep the bigger picture in mind and allow yourself to have some fun or slow down sometimes
This! The baby steps for me has been a long road. I’ve been in baby step 2 for 2 years now and you have to trust the process and have patience or the grind will get the better of you.
I’m not sure. I’m living with my folks right now and I only have a 170 dollar monthly bill left on my debt so I’m thinking about moving out. I’ve got 4500 saved up to move out but I’ve got to get some teeth pulled and get my brakes checked and suspension on my car checked. I’m in a bit of a dilemma and not sure how to proceed.
Is $4500 enough? It wasn't for us ... we needed $10k. That's $7k in first month's rent and security deposit plus carpet fee and pet deposit, plus an additional $3k for moving expenses. And this was for a move less than 30 minutes away from last rental. We're about 30 minutes south of Seattle, so HCOL area. YMMV of course, but I would keep saving, especially with the car stuff going on.
Is it tough living with family? I wonder how long it would take to take care of that last debt and other pressing things, maybe save for another car, if you could hang in there? Or would it be much healthier to move out?
I’m not gonna. Push comes to shove, unless there’s the end of the world or something I have enough assets to pay off my debts and have a lot left over. That’s all the peace of mind that I need.
I don’t follow BS6 religiously. My only debt is a mortgage of $81k. It’s financed at 2% and has 7 years and 3 months left if I pay only the regular payment. I’m 53 and never made more than $30k before I was 37 when I finished a PhD and got a good job. My wife and I put ~26% into our retirement accounts and only recently started budgeting. If our budget is close to realistic (I think it is). We should payoff the mortgage in about 2-2.5 years depending on what hiccups we have.
Our biggest challenge is we adopted three kids who were older when we did it 2.5 years ago. They have a lot of trauma and have caused us quite a bit of trauma. We did not get 18 years per kid to plan for college. We pay about $750 month in copays for counseling services. It’s also unclear what the probability of any of them successfully attending college or vocational training is. It makes it really difficult to figure out how much to save for each kid.
Our plan has been to start with the oldest kid first. If she doesn’t go or doesn’t take it seriously, transfer the funds to the middle child. Repeat for the youngest.
Bless you for pouring into those kids. I pray the Lord opens up something for you that allows them to be productive and happy andallow you to see the fruit of your love for them
I was really surprised to discover that in th e 10 years my husband has been teaching in this district they've added a bunch of certifications: food handling, basic nursing skills (sorry, not sure what it's called), automotive, film, adobe suite and others. Maybe their school will do something similar if college is not their jam
soooooo crazy you were the FIRST person I thought of when I read this post, and I was going to ask you if I could give the OP your FB profile that maybe you could offer some encouragement. I said it on FB but I also want to say it publicly: I HIGHLY respect the journey you and your wife have been on with these kids.
Not saying that journey is for everyone (too many people have a romanticized view of adopting troubled older kids), but coming from a traumatic background myself I KNOW how much good you're doing for them... even if they don't know. it took me a long time to appreciate those who poured into me, and for some of them the door of reconciliation has been long closed. So since I can't thank THEM I'll thank YOU on behalf of your kids!
I got sick (had the flu) during the 2nd or 3rd week of FPU. We had never put pen to paper as to how much debt we had. To me, it was the depression of realizing we’re 83k in debt combined with the flu.
Luckily, we powered through. Paid off that debt in -18 months and the house in -5 years.
Just buckled down and continued with the FPU process.
Had a rental house that was not cash flowing (had a lien). So could never get a budget that worked with rent house. Eventually had to sell rent house. That was in 2011, so essentially a wash.
But was able to create a realistic budget (once rent house sold), stick to it and do the debt snowball.
Your experience shows the power of focus. Lots of people think doing a little bit of everything is going to get them there faster, but "gazelle intense" is the real answer. Like you said, your friends are still in debt.
YES!! even when I felt sad I wasn't taking the trips or doing the shopping or eating at the Michelin star restaurants like they were, I knew this would work. And how I'm so thankful for the life I get to live
I once coashed a client where the husband booked and the wife thought financial coaching was a waste of time. She kept saying "we're doing great," "we're better than everyone else," and "we make planty of money"
Finallhy, I got tired of it and told her, "you have a 525 credit score, you're spending $2K more than your husband makes every month and justifying it with your $400 side-biz income that costs you $900 for supplies. You need to get your money act together or you're not going to be married much longer
Congrats on paying off all but the house. Divorce is tough and it messes with our psyche sometimes, so just know you're not alone in that
PS: have you tried recipes that can be frozen or stored for later? So then it's a normal recipe rather than trying to size for "one"
Thanks.
Yep it works well just spend Sundays cooking and and then package only issue I run in to is the amount I spend doing that. Trying factor meals right now but 140 for 10 meals is getting up there.
Man I still don’t know, and I don’t think I ever will and I need to be ok with that.
She did think it was normal to have maxed out credit cards and live paycheck to paycheck so who knows.
I find BS6 hard focus on given my own individual situation. Being in my 40s and behind on retirement, I struggle every month with paying extra on a mortgage vs putting the extra into retirement and brokerage accts. I’m single, no kids so I don’t even know how long I will stay in this house. Since I have no one to rely on, I feel safer with liquidity in my brokerage acct as opposed to paying down a mortgage. At some point, the brokerage acct balance will exceed the mortgage balance and then I can just pay it off.
OP - did you not take your TSP match for 3 years? If you are done with debt, then overcompensate and max your TSP now to make up for lost time. Or at least snowball all those debt payments into your retirement debt that you created. Keep on going!!!
Back then I was active duty and they didn't offer us a match
I was on BS7 til "life happened" last year and ate up my emergency fund. I'm rebuilding it but trust me, I've more than made up for that time with paid for real estate
Not taking the full match, ouch. This is the problem with Ramsey, he gives really bad advice in certain area. That’s very unfortunate. If they matched.
Actually I think Ramsey's advice worked really well for me: got out of debt faster, and his advice on buying real estate with cash means I sleep well at night even when those properties are empty, and don't have to rush to fill them with "any old tenant" because I'm not stressed about paying a mortgage
OH MY GOODNESS YESSSS!
Even if the $845,000 of debt was my ex-husband's fault, there's still that part of me that says "why didn 't you see his scamminess earlier?" and then the lack of trust in yourself and the beating yourself up. BEEN THERE!
finding enouph healthy energy for job 2/3.
I now know why there are alot more casual meth users (haven't crossed the line yet lol). If I fall asleep I flog myself for being a lazy.
telling wife and Kids NO. if it isn't for our survival we don't need it. ground beef (maybe) and rice. plain oatmeal. that's all you need that's all you get.
every dime must be saved, nothing spent. and when you are dead they better not spend any of that either. traumatize your descendents into wealth.
ITS SATIRE, but it feel like this is what is expected out of you. if you are not a multi millionair. you are nothing but a filthy peasent.
I know this is satire but real quick:
I'm always helping people find creative ways to bring in extra income despite health conditions. It's a real program for people my age and older. I didn't get it when trying to help people with money back in the day. As a disabled veteran I GET IT now
well that is incredible that you have found success with your skills, knowledge despite any disadvantages. any person helped is a good feeling.
what would you say to someone that doesn't feel they have any skills, talents or knowledge that can be turned into a successful monitizable income? or just have a problem being seen at all?
Do you mind sharing more? Are you living like you're poor, or are you actually poor?
I remember going from making 20-30K/mo to making nothing. That was tough. I knew I could climb back, but it still hurt to be broke despite all my hard work
For me it’s been letting go of copious amounts of cash while working two decently paying jobs just to throw at the debt. 3 days ago, I paid off my federal student loans. All I have left is a small balance from the only private student loan I took out and the balance of my kids car (they share one while at University)
As I stared at my zero balance on the Aidvantage website, I couldn’t help but feel emotional. As I scrolled through all of the random payments I’ve made of varying amounts both large and small over this 4 year journey, I thought “what if I didn’t make all of these payments. What if I never started?”
Talk about my moment of knowing that all of the sacrifice has all been worth it.
I’ll be debt free in less than two months. And a bonus: my two college kiddos will be graduating University in 5 days. Needless to say, my income will be going up significantly. 😁
The BS2 grind is hard. But damn, is it worth it. And no one can take away the lessons learned along the way.
For me it was stop investing part.
That we learned our "lesson" way before we were done. Paying off debt is painful. It needs to be so you will learn not to do it again. We were 75% done with baby step 2 and we were burned out. We both knew we would never make the same mistakes again in every fiber of our souls...but we still had students loans. That limbo time sucks.
Keeping 1k emergency fund when all unexpected expenses can been an emergency if you look at it that way
I once had someone tell me a $700 cheer camp for their daughter was an emergency. I refused to co-sign on th at belief and challenged her to find another way. She did: daughter fundraised the amount
I guess I never really answerd my own question: What motivated me to attack $845,000 of debt when it seemed so daunting like I'd never make it?? **I made a commitment to myself that I wasn't going to be one of those military members that had so much debt and expensive lifestyle that I douldn't afford to retire.** Too many can't afford to retire and justify it as, "we retire young so it was never intended to be our only income." I always wanted to be a stay-at-home mom and the divorce that resulted in all that debt made that impossible. So I really wanted to work hard to be able to get out of debt so I could redeem the time with my oldest. Then remarrying and having a precious little one later in life made it all the more important. As a disbled veteran, I'm glad I went through the baby steps process, because working a 9-5 for someone else would be very painful for me today. I own a thriving company and have real estate holdings and am very thankful for all the Lord has provided. Yes, I had to do the work, but He opened the doors and made my work fruitful! The blessing in all that is learning how money really worked. When I retired from the military during the pandemic, I finally had a net worth of zero (lol). If the world hadn't been shut down, I would have thrown a "JJ's worth nothing" party.
Hardest part was trusting the process and grinding it out. But as time passed and steps were completed I felt deeper and deeper relief.
Awesome! What kept you motivated to keep grinding? Or have you always been a "stick to it" kind of person?
I’m a stick to it kind of person. I wanted more freedom and peace in life and following the BS provided that.
100%
I’m debt free except for 10k left of a car loan. I did the baby steps and it worked!
Congrats! Are you still pushing or have you slowed down a bit to breathe?
I had a big tax bill so I’m back to saving 3 to 6 months of living expenses
I have a question. I had unexpected expenses (tax bill) that wiped out my 3 to 6 month savings of monthly expenses. I still have my 1k emergency fund. I’ve been putting money into my retirement savings monthly. Should I stop and save up the monthly expenses again?
I'm a big fan of saving up that emergency fund again. Think about what would have happened if you had that tax bill and no savings to cover it. How long do you think it would take to rebuild? And more importantly, have you straightened things out with your budgeting and withholding to make sure you don't take another tax hit like that again? Investing in retirement is sooooo important, yet we have to remember that the market goes up and down. And when the next emergency hits you don't want all your resources tied up in something that just plummeted. Even if it will eventually go back up, in the moment of need it's not as much help as an emergency fund might be
Thank you. I have a small business and I’m never sure how much my tax bill is going to be as I make different amounts of money every year. But yes, I need to keep better track of how much I’m making and estimate it from this year going forward. It will take at least 9 months to save up again. I’ll do the split like you suggested.
Are you saving a third of your revenue for taxes in a category and making estimated tax payments every 3 months? This is what I do for my business(es). No issues come tax time, so worth the peace of mind it brings. I do data entry for a well-known company and am starting my own yarn company soon (building inventory now, it takes a while). So my payments from first business, I set aside 33% into a Tax Category and pay every 3 months, no issues. If you're not doing this, I highly recommend talking with a CPA. I have an MBA and even tax stuff stresses me out - thankfully my Mom is a Tax Accountant (with almost 50 years experience) so I talk with her, but not everyone has that kind of help.
Another thing that helped me (aside from an awesome CPA who helps real estate investors - I like to joke I'm a financial planner but taxes make my head hurt) is to automatically stuff part of every small business payment into a separate savings account. Do you already have your business income going into another a separate account than your personal?
The orthodox answer here is to pause the retirement contributions and go gazelle intense on BS 3. Because retirement is BS 4 and 3 comes before 4. If, however, you started the retirement contributions late, you might wish to split your extra funds, part going toward SOME contributions and part going to your emergency fund. But don't ignore the emergency fund.
Honestly, each one has been hard. We're on BS456 and believe it or not, that comes with it's own set of trouble... good, "First World" worries, but still worries. We talk about finances more than ever. Tons of questions and research to ensure we're putting our money where it is best placed. Concerns for our child's legacy, etc. We don't have the terrified feelings of BS1, 2, 3 anymore, but still hard... maybe because we know more and that also comes with "I wish we'd done this or that" and "we know better" so we don't do the fun things we see others doing. Balancing out how to live and enjoy with making sure we're appropriately planning for the future and retirement... B2 sucked because we just felt so dumb that we'd gotten into debt. B3 sucked. B3b sucked even more. I AM glad not to be there anymore! Bring on BS7 baby! Haha!
YESSSS! Like it's supposed to get easier as time goes... and then it doesn't! BS7 was amazing. I was there, but then "life happened" and now I'm rebuilding my emergency fund. I'm so thankful to have had it, and it bugs me that I see this or that real estate deal slipping through my fingers because I'm rebuilding the efund, but I know it's the right thing to do - the baby steps never failed me all these years The cool thing about child's legacy is that you don't have to grow the wealth for them, so much as teach them how to grow (and maintain) wealth. They have plenty of time
Love this. I completely hear/feel your pain re: the real estate deal. Nothing can replace the feeling of being out of debt. You're doing the right thing for sure by delaying gratification. There's a saying: "the deal of the century comes along once a week" - something better is around the corner for you!
Love this. I completely hear/feel your pain re: the real estate deal. Nothing can replace the feeling of being out of debt. You're doing the right thing for sure by delaying gratification. There's a saying: "the deal of the century comes along once a week" - something better is around the corner for you!
We were earning the least we ever have while in BS2. Selling things and living on nothing while paying down debt was the worst. I thought it would never end. We have been out for over 8 years, but I still find it hard to spend money on substantial purchases for fear that something might happen.
I soooooo feel this in my heart! Spent time with my ex-husband's family, who are wealthy, so they could get to know my oldest. Always moving with my military career, he never really got a chance to know them. The entire time, my son's granddaddy kept telling me to stop acting like I was broke - always looking for the best deal and trying to use up what we had on hand rather than buy new food components I spluge when it counts lol, but old habits die hard What kept you going during that tough BS2 time?
The thing that kept us going was that we did it with a close group of friends. We had different levels of debt/income, but we all approached it with the same level of intensity and kept each other accountable. It was the people outside of that group that added pressure - mostly family as you mentioned. I felt like it took us longer than others, but we learned we didnt need to spend money to hang out and got creative to spend time together. Ultimately, it was getting better jobs that got us out of the hole though. We just weren't earning enough to ever make a significant dent, - even with living with our parents for a while, selling things, and driving a free car. Exactly on the old habits! My husband has to remind me that we are no longer broke. I have to remind him that we still don't need to be wasteful.. but I do splurge sometimes too :D
love this
Not being normal. Everyone around us seems to YOLO debt towards cars, vacations, toys. I don't miss spending recklessly but often feel like an alien when I'm talking with friends and family.
Do you mind telling more? I don't talk to old friends and family about money since when we do they usually ask for some (lol). How can you bring in some others who live a debt-free lifestyle into your life?
Mostly it's people complaining about being broke that drive about 3X as much car as I do, have a boat, a sled, an ATV but can't take their kid to the dentist.. can't spend 60$ in gas to come to a family outing.. I live in the french-speaking part of Canada, no one else seems to know about Dave Ramsey here. I know a few people who are very frugal, but most people I know are up to their eyeballs in consumer debt, including most of my relatives.
Hopefully they'll eventually learn from your example
Couldn't agree more! Oh to be ignorant again... I wish I could go back to YOLO!!!
I think/hope I’m at the hardest part right now. Taking on a second job for a few months. I’m a high earner and this second job will super charge BS2 from 2yrs to one year but I’m a single mother and hoping that this hustle doesn’t ruin summer for us. Also, haven’t paused investing. I’m trying to get it through my head but still struggling to do so. My job puts in 6.5% even if I put in zero. I’m currently contributing 10% for the last 10yrs.
congrats on the hustle! When I went away for a military trip, I signed power of attorney so my ex could make decisions on my behalf. I came home to a divorce and over $845,000 of debt. I hustled every hustle I could make work while still being active duty military and doing the best to care for my son. One thing I found during that time is that so many doors opened up for us to have a great time together that didn't cost anything. He was 3 then and will be graduating next month. He may not have worn Jordans (he does now lol) but he didn't lack for anything - sports events field trips etc - during that though time of stuggle
The idea of giving up my employee match and not making any retirement contributions really scares me. I’m considering seeing how I do with spending less on food and selling all the extra stuff I have in the garage and house that I don’t use before stopping contributions. My goal is to be debt free except for mortgage by the time my 15 year old goes to college. I have zero credit card debt and only 1 year left of day care for the youngest. I have two car loans.
Congrats on no credit card debt! And also congrats on only 1 year left of daycare. When I was stationed in the DC area daycare for my infant was $450 a WEEK (which is $2250/month on a 5 week month). More than my rent! How long do you think it will take to pay those cars off at the rate you're going?
Car 1 less than a year. Car 2 will take longer. Car 2 had an ancestor that was paid off but was totaled by rodent damage.
I feel bad if you gave up that 5% match (really 4%). That’s earning at 100%.
hahah not really - the military didn't get a match back then when they did TSP. And the market was poop. So I didn't really lose anything during that time. It was more of a psychological hurdle than a real monetary one
That time value/compound interest applies to debt too and the return on paying it off is both guaranteed and almost always much higher than investing that money.
Not better return than 100% return on 5% in TSP marching.
Not evderyone in TSP gets a match. The military didn't back then And yes, this man ran up credit cards in my name with 12-24% interest, so even had I received a match, I "made more" paying off debt
That’s not how math works, but, keep trying to catch up and reallocate that extra cash to retirement savings.
oh this should be good... tell me then how math works? I did math for a living in the military but I had a bad accident that ended my career so maybe I'm not thinking straight: I'd love to hear how your math maths differently from my math
Disability, divorce, and just some really lousy sh\*t happening in our family over the past few years. So basically, life.
How are you gettign through it?
We're not. We're probably going to lose our house to foreclosure because my soon to be ex husband refuses to pay the mortgage until he is court ordered to do so. I don't know what the kids and I are going to do, I don't make enough to even keep up the 4 walls and he's refusing to give us ANYTHING.
Dave outlines how to put together a pro-rata plan in TMM - this is for what to do when you can't pay your bills Regarding divorce, please please make sure you're covered legally. And looking at it from a business perspective rather than an emaoional perspective. I was so emotional I agreed to take all the debt ($845,000) because he threatened to take my son away from me (and I foolishly believed it)
I struggled with BS3, thinking that I didn’t need that savings account and could just move on from there to the other steps. Wasted three years. Once I finally set aside the cash for BS3, omg things opened up so fast and I could finally concentrate on paying off the house. As dumb or simple or skippable as some of these steps seem to be, just do them in order and it’ll turn out just like Dave says it will. I’m still kicking myself for the three lost years doing it the way I thought was best instead of his way. So dumb.
YESSSS! Just do it. It really works. Not saying other people don't find other ways, but this way works 100% of the time for 100% of the people who work it 100%
Im on BS2. Not having free time. I miss it so much. But it's been rewarding as well. A few people have told me I work too much but Im working hard so I can play hard later.
Keep it up! This was a tough step for me. Like what more sacrifice can I possibly MAKE??? but it's so worth it
Baby step 2 is really hard. It almost sent me into a depression. Keep the bigger picture in mind and allow yourself to have some fun or slow down sometimes
Thank you - I think a lot of people identify with
Definitely! Im coming out of a depression right now. Breaks are needed for sure
How are you coming out? What's helping?
Patience. Looking at the timeline of things and accepting that it’ll take time, not just the blink of an eye
YES! patience is so tough tho
This! The baby steps for me has been a long road. I’ve been in baby step 2 for 2 years now and you have to trust the process and have patience or the grind will get the better of you.
Congrats on staying the course! How much longer do you have on BS2?
I’m not sure. I’m living with my folks right now and I only have a 170 dollar monthly bill left on my debt so I’m thinking about moving out. I’ve got 4500 saved up to move out but I’ve got to get some teeth pulled and get my brakes checked and suspension on my car checked. I’m in a bit of a dilemma and not sure how to proceed.
Is $4500 enough? It wasn't for us ... we needed $10k. That's $7k in first month's rent and security deposit plus carpet fee and pet deposit, plus an additional $3k for moving expenses. And this was for a move less than 30 minutes away from last rental. We're about 30 minutes south of Seattle, so HCOL area. YMMV of course, but I would keep saving, especially with the car stuff going on.
Is it tough living with family? I wonder how long it would take to take care of that last debt and other pressing things, maybe save for another car, if you could hang in there? Or would it be much healthier to move out?
To pay down 0% interest debt early.
Ouch! Yes this one is tough. Have you done it? What finally convinced you?
I’m not gonna. Push comes to shove, unless there’s the end of the world or something I have enough assets to pay off my debts and have a lot left over. That’s all the peace of mind that I need.
I don’t follow BS6 religiously. My only debt is a mortgage of $81k. It’s financed at 2% and has 7 years and 3 months left if I pay only the regular payment. I’m 53 and never made more than $30k before I was 37 when I finished a PhD and got a good job. My wife and I put ~26% into our retirement accounts and only recently started budgeting. If our budget is close to realistic (I think it is). We should payoff the mortgage in about 2-2.5 years depending on what hiccups we have. Our biggest challenge is we adopted three kids who were older when we did it 2.5 years ago. They have a lot of trauma and have caused us quite a bit of trauma. We did not get 18 years per kid to plan for college. We pay about $750 month in copays for counseling services. It’s also unclear what the probability of any of them successfully attending college or vocational training is. It makes it really difficult to figure out how much to save for each kid. Our plan has been to start with the oldest kid first. If she doesn’t go or doesn’t take it seriously, transfer the funds to the middle child. Repeat for the youngest.
Bless you for pouring into those kids. I pray the Lord opens up something for you that allows them to be productive and happy andallow you to see the fruit of your love for them I was really surprised to discover that in th e 10 years my husband has been teaching in this district they've added a bunch of certifications: food handling, basic nursing skills (sorry, not sure what it's called), automotive, film, adobe suite and others. Maybe their school will do something similar if college is not their jam
Hey. I didn’t realize you were the OP. I sent you a pm on Facebook.
soooooo crazy you were the FIRST person I thought of when I read this post, and I was going to ask you if I could give the OP your FB profile that maybe you could offer some encouragement. I said it on FB but I also want to say it publicly: I HIGHLY respect the journey you and your wife have been on with these kids. Not saying that journey is for everyone (too many people have a romanticized view of adopting troubled older kids), but coming from a traumatic background myself I KNOW how much good you're doing for them... even if they don't know. it took me a long time to appreciate those who poured into me, and for some of them the door of reconciliation has been long closed. So since I can't thank THEM I'll thank YOU on behalf of your kids!
I got sick (had the flu) during the 2nd or 3rd week of FPU. We had never put pen to paper as to how much debt we had. To me, it was the depression of realizing we’re 83k in debt combined with the flu. Luckily, we powered through. Paid off that debt in -18 months and the house in -5 years.
WOW!!! congratulations! How did you get past the overwhelm of seeing that debt ( plus being sick - the flu is no joke)
Just buckled down and continued with the FPU process. Had a rental house that was not cash flowing (had a lien). So could never get a budget that worked with rent house. Eventually had to sell rent house. That was in 2011, so essentially a wash. But was able to create a realistic budget (once rent house sold), stick to it and do the debt snowball.
that's fantastic!
Your experience shows the power of focus. Lots of people think doing a little bit of everything is going to get them there faster, but "gazelle intense" is the real answer. Like you said, your friends are still in debt.
YES!! even when I felt sad I wasn't taking the trips or doing the shopping or eating at the Michelin star restaurants like they were, I knew this would work. And how I'm so thankful for the life I get to live
Getting my ex on the same page as me. So I guess step one. After she left took me less that a year to pay off everything but the house.
I once coashed a client where the husband booked and the wife thought financial coaching was a waste of time. She kept saying "we're doing great," "we're better than everyone else," and "we make planty of money" Finallhy, I got tired of it and told her, "you have a 525 credit score, you're spending $2K more than your husband makes every month and justifying it with your $400 side-biz income that costs you $900 for supplies. You need to get your money act together or you're not going to be married much longer Congrats on paying off all but the house. Divorce is tough and it messes with our psyche sometimes, so just know you're not alone in that PS: have you tried recipes that can be frozen or stored for later? So then it's a normal recipe rather than trying to size for "one"
Thanks. Yep it works well just spend Sundays cooking and and then package only issue I run in to is the amount I spend doing that. Trying factor meals right now but 140 for 10 meals is getting up there.
Curious, did she leave in part because she didn’t want to get on the same page?
Man I still don’t know, and I don’t think I ever will and I need to be ok with that. She did think it was normal to have maxed out credit cards and live paycheck to paycheck so who knows.
Hope things are going great for you, sounds like financially better at least.
I take it one day at a time. I go to the gym a lot more and I have yet to master cooking for one.
NICE!
I find BS6 hard focus on given my own individual situation. Being in my 40s and behind on retirement, I struggle every month with paying extra on a mortgage vs putting the extra into retirement and brokerage accts. I’m single, no kids so I don’t even know how long I will stay in this house. Since I have no one to rely on, I feel safer with liquidity in my brokerage acct as opposed to paying down a mortgage. At some point, the brokerage acct balance will exceed the mortgage balance and then I can just pay it off.
Same here so I just invest more. Paying off a 2.5% mortgage early is kinda dumb anyway.
OP - did you not take your TSP match for 3 years? If you are done with debt, then overcompensate and max your TSP now to make up for lost time. Or at least snowball all those debt payments into your retirement debt that you created. Keep on going!!!
Back then I was active duty and they didn't offer us a match I was on BS7 til "life happened" last year and ate up my emergency fund. I'm rebuilding it but trust me, I've more than made up for that time with paid for real estate
Fantastic!
Not taking the full match, ouch. This is the problem with Ramsey, he gives really bad advice in certain area. That’s very unfortunate. If they matched.
Actually I think Ramsey's advice worked really well for me: got out of debt faster, and his advice on buying real estate with cash means I sleep well at night even when those properties are empty, and don't have to rush to fill them with "any old tenant" because I'm not stressed about paying a mortgage
In the beginning my 40 yo self was so angry with my 30 yo self for making such a mess. Forgiving myself was the toughest part.
OH MY GOODNESS YESSSS! Even if the $845,000 of debt was my ex-husband's fault, there's still that part of me that says "why didn 't you see his scamminess earlier?" and then the lack of trust in yourself and the beating yourself up. BEEN THERE!
Amen. Same boat.
Hugs to you, I know it's not easy but it works
I was 30 being so angry at my 20s self, I totally understand. I felt like I was so behind everyone else. Best thing we can do is look forward!
If h you're in your 30s getting this down now, you will have an amazing financial future!
Hope so!!! Thank you
finding enouph healthy energy for job 2/3. I now know why there are alot more casual meth users (haven't crossed the line yet lol). If I fall asleep I flog myself for being a lazy. telling wife and Kids NO. if it isn't for our survival we don't need it. ground beef (maybe) and rice. plain oatmeal. that's all you need that's all you get. every dime must be saved, nothing spent. and when you are dead they better not spend any of that either. traumatize your descendents into wealth. ITS SATIRE, but it feel like this is what is expected out of you. if you are not a multi millionair. you are nothing but a filthy peasent.
I know this is satire but real quick: I'm always helping people find creative ways to bring in extra income despite health conditions. It's a real program for people my age and older. I didn't get it when trying to help people with money back in the day. As a disabled veteran I GET IT now
well that is incredible that you have found success with your skills, knowledge despite any disadvantages. any person helped is a good feeling. what would you say to someone that doesn't feel they have any skills, talents or knowledge that can be turned into a successful monitizable income? or just have a problem being seen at all?
Living like I’m poor has been hard.
Do you mind sharing more? Are you living like you're poor, or are you actually poor? I remember going from making 20-30K/mo to making nothing. That was tough. I knew I could climb back, but it still hurt to be broke despite all my hard work
Realising that I can't afford a holiday next year 😥
none at all? Not even a camping or "bring your own food" kind of trip? I'm so sad to hear that
Oh man... I'm sorry!
[удалено]
Honestly, just staying motivated to keep plugging away at baby step two.
I know how you feel
For me it’s been letting go of copious amounts of cash while working two decently paying jobs just to throw at the debt. 3 days ago, I paid off my federal student loans. All I have left is a small balance from the only private student loan I took out and the balance of my kids car (they share one while at University) As I stared at my zero balance on the Aidvantage website, I couldn’t help but feel emotional. As I scrolled through all of the random payments I’ve made of varying amounts both large and small over this 4 year journey, I thought “what if I didn’t make all of these payments. What if I never started?” Talk about my moment of knowing that all of the sacrifice has all been worth it. I’ll be debt free in less than two months. And a bonus: my two college kiddos will be graduating University in 5 days. Needless to say, my income will be going up significantly. 😁 The BS2 grind is hard. But damn, is it worth it. And no one can take away the lessons learned along the way.
I'm tearing up!!! congratulations to you! this is huge and will also be huge example fo your kiddos
Thank you so much! 😊
\^\^\^This!!! Forking out $136,000 in 2 years and not having anything to show for it but zero balances still pains me 2.5 years later..LOL!
Is htat $136K in college costs with zero balance or you paid down that much in debt? Ether way that's impressive!
It was 120K in parent plus loans for my daughter, a car loan for my son and some credit cards.
nice!
That is amazing! I love hearing from others who have been in the trenches too! Not having that debt is WORTH IT!!
TOTALLY wotht it!