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Posts tagged with: dave ramsey

Long Term Planning


I am really proud of ourselves! When 2014 began, I made a full list of “goals” (I prefer the word “goal” over “resolution”). This is a technique I actually learned from a career workshop I took a few years back, called “Career Mapping” (but I applied the same principles to all aspects of my life).

Basically, you think of your longer term goals (can be 10 year, 5 year, or 1 year). I started with 1-year goals in categories such as: financial, family/relationships, career, hobbies, etc. The idea is that you first come up with concrete “long term” goals. Then you “map out” your entire year by breaking up the big goals into smaller chunks. For me, I broke down the goals by month so every month I know a small, reasonable goal that I want to attain (with the idea being that all the small goals ultimately lead to fulfillment of the bigger, long-term goal).

Anyway, when I first did my 2014 Goals (Life Mapping, if you will), I did not think we would be able to pay off our credit cards by the end of the year. With about $1,000 per month for debt payments, coupled with $10,000 of credit card debt, plus additional other debts to account for, I thought it was an impossible goal. We would be close, but not quite out of credit card debt yet.

When I started blogging here (in March) I set the official goal date: March 2015.

And here we are….the beginning of June 2014. And I can officially say “We are credit card debt-free!!!!!!”

It’s a fantastic feeling!

But being me, I’m always looking ahead. I wish the credit cards were our biggest obstacle, but unfortunately, that’s just the tip of the debt iceberg. The cold, hard truth is that we still have over $100,000 of debt. About $95,000 of student loans, $22,000 of car loan, and $8,000 of medical debt (note, these are approximate numbers that are being rounded off….my last “official” debt update was here and I’ll do another one probably next week).

With this amount of debt, its difficult to put everything on “hold” until the debt is gone, because we’re looking at YEARS worth of repayment.

So I want to submit a question to readers: At what point do we begin long-term savings for retirement?

I know the Dave Ramsey school of thought is not to begin retirement savings until one is debt-free. However, there seems to be some ambiguity, because I’ve also heard (on the radio show) Dave tell people that if their debt repayment is going to take a significant amount of time (though what constitutes “significant” is not clearly defined), that they should not forego retirement savings for the entire time.

Currently we are 30 and 31, respectively, and have a reasonable EF (approx. $11,000), but no official “retirement” savings – no 401K, Roth IRA, etc.

This also begs the question of what constitutes an EF versus retirement. Some of our funds (about $6,000), which I have considered part of our “EF” is actually tied up in money market mutual funds. Although technically liquid, if we were to dip into it we would have to pay taxes on money made from their sale (dividends are currently reinvested) and my plan has been to NOT touch the money. Given these circumstances, wouldn’t this be better referenced as “retirement” funds as opposed to an emergency fund?

Right now I think we would like to keep up our Gazelle intensity with debt repayment. We need to knock down some of our debts so that once my school loan deferment period ends (February 2015), we will comfortably be able to make the huge payments. But at that point, I’ve always said I don’t feel the same “intensity” to eradicate the student loans as I have with our other debts. Would it be wise, at that point, to begin saving some toward retirement?

What percentages would you be putting toward retirement versus debt? Obviously, we’ll have minimum payment obligations so we’ll have to abide by that, but anything above minimums – would you put 50% toward retirement and 50% toward extra debt payments (as an example)??

I’m just trying to think these things through and come up with some sort of long-term “game plan” for what to do with our money.

Advice and suggestions welcome!

The Psychological Aspect of Debt Repayment


I have been having a tough time lately.

We all know my #1 goal – ERADICATE credit card debt. Do whatever it takes to get it out of here!

And yet, I’m having such a tough time.

I look at all our other debts and I want to pay toward all of them (more than just the minimums), so I’m having a really hard time reminding myself that – NO! – I’m going to pay minimums for everything else, and put all the extra money toward credit card debt.

It’s especially hard since the credit card I’m currently paying toward (Wells Fargo) has such a high balance. I really “get” the Ramsey-esque idea of paying off lower debt first for the psychological “boost.” But in this case we’re talking about a HUGE difference in interest rates!

Here are my two credit cards that currently have balances (remember – I just paid off a third card about a month ago)

  • Wells Fargo, APR = 13.65%
  • Bank of America, APR = 7.24%

My Wells Fargo card has almost DOUBLE the interest rate as my Bank of America card. I want to have the discipline to tackle the higher APR card first so I’m not just throwing away money toward interest……but it’s hard, y’all!!! (side-note:  my WF balance is almost thee times higher than the BoA balance. I’ll give you updated balances at the beginning of May).


Same thing applies to the license debt we’re paying. The minimum is $55/month, but when I pay online, it’s broken down into a dozen smaller fees. Many are only in the $250 range. It would feel SO GOOD just to pay the entire $250, instead of dragging it out over FIVE MONTHS paying only the minimums. But this is interest-free debt so it makes no sense to do that when I’m paying HUNDREDS in interest to Wells Fargo every month.


Somebody save me from myself! I’m struggling!