Baby step 2 of the Dave Ramsey (DR) plan is paying down debt and stopping the 401(k). I really wanted to just take a year off from not contributing to my 401(k) but looks like it might be two years.
My question is, when I sell the house, I should be able to knock out a great deal of the CC debt and student loans, do I wait an additional year before adding to my retirement paying off the student loans or start it back up in August? August is when I originally stopped contributing.
The new job I'm going to does not match, 🙄🤦🏾♀️, so I'm considering opening up a Roth and depositing 3% each pay period starting in August. I just do not want to go too long without contributing something. I know once the debt is paid off, DR says to contribute 15% to retirement, I was thinking more of 30% to hit the max of $18,500 each year. My goal is it deposit the max until retirement actually starting in 2019.
Ugh I can just kick myself, with this mess I've gotten myself into. 44, I should be talking about early retirement and here I am discussing paying off debt.
Getting ready to now go through my envelopes to see how I'm doing. I spent my fun money this week on sorority crap, that I'm over. Thank goodness this will be my last year that I'm active, until I get a handle on things. Well I can't say a ton, maybe $20-$25 it's just I could have used the money for something else. 🙄🤦🏾♀️
I check my points for Fetch and I'm almost at 20k points, there's a book I'd like to purchase via Amazon but I'm going to hold off. I'll use the points for Sephora to pick up some makeup I need. It's better to borrow from the library anyway.
Reading these financial books really put me in a bad mood. I realize that I'm dirt poor. That I have nothing that will make money for me if I lose my job. Now I'm thinking what can I do to earn money while I'm working?
401(k)
May 21st, 2018 at 02:08 am
May 21st, 2018 at 11:20 am 1526901651
Dave Ramsey's whole philosophy requires gazelle intensity. Do the steps in the order he says and you will be far better off in the long run. The desire to catch up your retirement is what should be motivating you to pay off the debt fast!! And the sooner you do that the sooner you can contribute 20% to your 401K.
From what I know reading your blog, I think you need to pay the minimums, get your car fund to $5K, focus on debt payoff and then worry about retirement. FOCUS on one thing at a time. You are trying to do several things at once and that is losing the momentum and gazelle intensity required to make progress quickly. Now I know you will get the house proceeds, so I would then buy a $5K car to get that potential storm off your back. Pay off as much debt as possible with the proceeds. My next step would be to figure out how much money I need to put to the remaining debt to pay off in one year. I would cut out all 'extra' and 'fun' expenses to make this happen. I would limit sinking funds only to the very basic ones (insurance for example). I would do my best each month to squeeze every last dollar to pay off the debt, knowing that at the finish line all that money sent to debt will be mine. Mine to save for retirement, mine to spend on wants, and mine to save for a down payment on a home (without taking away from my retirement goal to do so). I would cheer for no longer being slave to the lender!
Cheering for you!!
May 21st, 2018 at 01:09 pm 1526908156
One of the biggest issues I have with The Dave Ramsey plan is that he assumes so much. That your job or income will stay the same or steadily increase in income that LIFE will not happen and derail your gazelle intensity and most important that we all will have time to catch up on retirement etc. slow and steady wins the race in my book. cutit back to bare minimum for contribution and focus on paying all you can with the rest of income.
May 21st, 2018 at 02:06 pm 1526911581
May 21st, 2018 at 05:38 pm 1526924280
May 21st, 2018 at 08:18 pm 1526933898
Go gazelle on those loans. Like mentioned above, create a concrete payoff schedule with a date.
You have to remember, it’s going to take time and a strong plan,
May 21st, 2018 at 08:54 pm 1526936085
I think you need to look at your side bar and see all the things you've paid off. You can continue to pay stuff off. Don't let the books discourage you. I think Dave Ramsey has good advice, but some of it is is a bit extreme for most. Just use your common sense. A number of years ago Larry Winget had a show called "Big Spender" where he worked with people who made good money (not rich, but not poor) and he had them make a budget and do things to help themselves. Most of it was common sense. Quit eating out. Quit buying "wants" and only concentrate on needs. Maybe checkout his book on being broke because you want to be or something like that. You've come so far. Don't give up!