All I want to say is: sure am glad that I have the extra money I posted about yesterday. Details to come soon…
But it brings me back to the me vs. Dave Ramsey thoughts (and I’m not really against Dave – I have serious respect for him and his teachings). If I was following Dave’s baby steps, I’d be out some cash that I might need in order to make a more serious investment toward paying off our debt. But I’m not following his baby steps (although the 10 stones aren’t all that different) because I think my personal situation and comfort level don’t really jive with them.
But if Dave works for you – great! I am glad you have found an approach that you can dedicate yourself to. I have, too! And we can still support each other in our efforts and not pass judgement on who is doing things right or who is doing things wrong. (I’d say personal finance has no right or wrong, but I think if you are reading this blog you totally know that there is a wrong.)
While we are at it, let me confide in you that I am contemplating not doing a debt snowball of the smallest loans to the biggest because you end up paying more in interest. But I ran the numbers and attacking the highest interest rate loan first (with little snowball) only saves me a few months in repayment, so that hardly seems worth it. What is worth it: a combination. Clearing out a few of our tiny student loans, using them as the snowball, and then attacking highest interest rate to lowest. My quick estimates say that could save us over a year on our repayment. We will be running the numbers again as we approach this possibility because of the variable interest rates that our loans have.
The other consideration is keeping momentum. We have 12 loans, so I want to set us up to be able to pay off about three loans a year. We may want to hop back and forth between small balances and high interest rates in order to keep our momentum going.
Some of you are going, oh geez, I don’t want to run numbers once, much less multiple times a year. But as a rocket scientist (really), running numbers isn’t intimidating and I think it’s actually sort of fun. I know. I’m a glutton for punishment.
Seriously, though. We are in debt with over 100k in student loans after 10 years of repayment. So I think momentum is important, but so is finding the way that works quickest. And if that means I have to adjust course here or there, rather than just sticking to some solid advice because it’s easy and clean cut – that’s the way I want to go.
There are tons of people who offer really solid plans for getting out of debt, it’s not so much about who’s (solid) advice you follow. It’s about just starting. Just picking a direction and heading down it as fast as you can. And while we are at it – some folks are going to run breakneck speed down that path and some are going to crawl. That’s fine, too. Just keep moving!
What about you? Are you a Dave Ramsey believer? Or have you found your own path out of debt?