Are you in credit card debt?

[Ninna]

I hope my post didn't make anyone feel less than me [Honey22?] how can that be? Trying to sell a horse boarding ranch with high costs & upkeep to get rid of our 2 mortgages and have some $ left for our kids edu since the our state is bankrupt? Sorry if hat is being condescending

 

[partgypsy]

My momma told me not to answer personal questions

Seriously I think this is kind of a loaded question. It seems the answers are heavily skewed to people who can answer "no debt" and the one person who defended using credit was heavily questioned for her choice of words.

I participate in a personal finance forum, and people are very disclosing of their financial picture. But talking about this in Pricescope, it feels weird. Or is it just me?

 

[lilyfoot]

My momma told me not to answer personal questions

Seriously I think this is kind of a loaded question. It seems the answers are heavily skewed to people who can answer "no debt" and the one person who defended using credit was heavily questioned for her choice of words.

I participate in a personal finance forum, and people are very disclosing of their financial picture. But talking about this in Pricescope, it feels weird. Or is it just me?

No, it's not just you. Honestly, I found the whole topic to be weird, because the OP herself said she doesn't have any cc debt. That is not meant to be offensive to the OP, it just seemed like a "random" topic to bring up, because it wasn't like she was looking for help getting out of cc debt or anything ..

btw, part gypsy, why is Rudolph green in your av? Just wondering

 

[partgypsy]

It's terrible! I need to get around to changing my avatar. My usual avatar is just the generic green person (only reason, my favorite color is green), so when it was Christmastime I made a green Rudolph for my avatar. After the switch it defaulted to Rudolph being my avatar again and it's July!

I'm trying to cut down on surfing on the internet so I'm not posting as much. The new forum actually looks pretty darn nice!

 

[monarch64]

My momma told me not to answer personal questions

Seriously I think this is kind of a loaded question. It seems the answers are heavily skewed to people who can answer "no debt" and the one person who defended using credit was heavily questioned for her choice of words.

I participate in a personal finance forum, and people are very disclosing of their financial picture. But talking about this in Pricescope, it feels weird. Or is it just me?

No, it's not just you. Honestly, I found the whole topic to be weird, because the OP herself said she doesn't have any cc debt. That is not meant to be offensive to the OP, it just seemed like a "random" topic to bring up, because it wasn't like she was looking for help getting out of cc debt or anything ..

btw, part gypsy, why is Rudolph green in your av? Just wondering

I completely agree with these sentiments. Divulging such personal information is a big deal in my book, and not to be shared with anyone except SO/spouse and financial professionals. My parents also raised me to mind my business.

 

[Dancing Fire]

My momma told me not to answer personal questions

Seriously I think this is kind of a loaded question. It seems the answers are heavily skewed to people who can answer "no debt" and the one person who defended using credit was heavily questioned for her choice of words.

I participate in a personal finance forum, and people are very disclosing of their financial picture. But talking about this in Pricescope, it feels weird. Or is it just me?

we are a nosy bunch.

 

[Irishgrrrl]

My momma told me not to answer personal questions

Seriously I think this is kind of a loaded question. It seems the answers are heavily skewed to people who can answer "no debt" and the one person who defended using credit was heavily questioned for her choice of words.

I participate in a personal finance forum, and people are very disclosing of their financial picture. But talking about this in Pricescope, it feels weird. Or is it just me?

No, it's not just you. Honestly, I found the whole topic to be weird, because the OP herself said she doesn't have any cc debt. That is not meant to be offensive to the OP, it just seemed like a "random" topic to bring up, because it wasn't like she was looking for help getting out of cc debt or anything ..

btw, part gypsy, why is Rudolph green in your av? Just wondering

I kind of agree with this, especially the bolded part. I might be taking this the wrong way (and, if so, I apologize in advance), but it seems like the whole tone of the OP was very "look how great I am because I don't have any CC debt." The title of the thread is "Are you in credit card debt?" And then, the first thing the OP said was "We're not." Just seems a little preachy to me.

DH and I do have some CC debt. However, we had valid reasons for incurring this debt and we're actively paying it down. Not that it's anyone else's business, of course.

 

[holly sparkle]

Nope, I pay it all off every month! Once bitten twice shy!!

 

[Haven]

Wait--If you find this topic to be too personal, why come into the thread at all? If I'm truly uncomfortable with a thread's topic I just don't click on it, and I definitely don't post in it. Especially if it's something that I feel isn't any of my business.

I did find it a bit bizarre that the OP is someone without CC debt rather than someone who is trying to get out of debt. I expected this to be a great "Let's motivate each other to pay off our debt" thread. Wishful thinking, I suppose.

As someone who climbed out of CC debt years ago and is very dedicated to living debt free, I like discussions about *how* people do that, and especially how they shifted their lifestyle to make it happen. I think *this* thread's most valuable discussion is the one surrounding whether all CC debt is bad debt. I already posted on that point, so I won't again, but I do think it was interesting.

 

[Irishgrrrl]

Wait--If you find this topic to be too personal, why come into the thread at all? If I'm truly uncomfortable with a thread's topic I just don't click on it, and I definitely don't post in it. Especially if it's something that I feel isn't any of my business.

I did find it a bit bizarre that the OP is someone without CC debt rather than someone who is trying to get out of debt. I expected this to be a great "Let's motivate each other to pay off our debt" thread. Wishful thinking, I suppose.

As someone who climbed out of CC debt years ago and is very dedicated to living debt free, I like discussions about *how* people do that, and especially how they shifted their lifestyle to make it happen. I think *this* thread's most valuable discussion is the one surrounding whether all CC debt is bad debt. I already posted on that point, so I won't again, but I do think it was interesting.

Haven, I hadn't planned on posting here until Part Gypsy and Lilyfoot posted their comments above. I agreed with them, and I didn't want them to think that they were the only ones who felt this way. But, since I posted a reply to PG and LF, I felt that I should reply to the OP as well. However, I intentionally kept my response rather vague.

And I commend you for paying off your CC debt and becoming committed to a debt-free lifestyle! DH and I are following Dave Ramsey's plan, and it's working well for us so far!

 

[Haven]

Hey, Irish!

We used Dave Ramsay's plan, too. It really worked for us, and it was a great way to set up an action plan. I found his "baby steps" made the most sense to us. We're still paying off some student debt of mine, and then it's on to the mortgage. I cannot WAIT to be completely debt free. It's going to feel so good!

 

[Irishgrrrl]

Haven, the Baby Steps are what really drew me in to DR's program too! I think the Baby Steps are very easy to understand, and they break the program down into manageable goals so you feel like you're actually GETTING somewhere! LOL! I'm loving it so far, and I'm glad it's working for you!

Have you guys done Baby Step 3 yet, or are you still working on Baby Step 2? (I know some people do BS3 before tackling their student loans, and some deal with student loans as part of BS2.) PLEASE don't feel that you have to answer if that's too personal! I'm just a little nervous about BS3 and I guess I'm looking for reassurance! LOL! I feel like DH and I are very motivated right now, since we're working on BS2, but I'm afraid that motivation might evaporate once we get to BS3!

 

[TravelingGal]

I will go out on a limb and say that I would bet that most people who have consumer cc debt and who are unable (vs unwilling) to pay it off in a timely manner feel foolish about it. Why? Because quite simply, it is not smart to buy things which you cannot afford. Period.

THAT being said, everyone knows only her own situation. There are people, as some noted here, who use cc's to get by in life. Sometimes, sh*t happens, and people are fortunate to have credit to rely in on cases like this. There are many sensible people who get in debt because sometimes, life takes an rough turn.

When I had my debt, I would like to think I was in the latter group, living off credit because I was unemployed. But if I were to be honest, a large chunk of my debt came from purchases that I simply didn't need. A new shirt because I just wanted something to cheer me up. A dinner on the town because I deserved it after a tough week. I'm already in debt? What's another $20? Etc, etc. Whatever my emotional needs were at the time, those purchases simply were not fiscally responsible. That is what I think many people are saying here.

I like hearing that many PSers don't carry debt. Makes me think I'm in sensible company, and that's not a bad thing.

 

[Haven]

We actually had BS3 finished before we started the baby steps at all, so we were all out of whack, so to speak. It was probably stupid, but I've always insisted that we have a lot of savings in the bank even though we were carrying student loans while saving up that money. I'm sure we should have paid off our loans before doing that, but I just wasn't comfortable not having the savings. (DH owns his own business, and it's client-based, so we never know how much he's going to earn in a month, that was why I was freakish about the savings.)

By the time we were married and started doing DR's baby steps the only debt we were carrying was educational loans and a mortgage that we took on right when we were married. If we didn't already have the savings, I probably would have wanted to save up three months' worth before we tackled the student loans, anyway. My loans have an interest rate of only 1% now because I've been getting reductions for consistent payments throughout the years, so a part of me feels that it isn't so bad to save up while still carrying some loans.

Now I just can't wait to wipe them out completely! And man oh man, are we going to have a party once we pay off this mortgage. A HUGE party!

If we had really read Dave Ramsay before we were married I don't think we would have bought the house so soon. I don't regret it because I LOVE it, but we only put 20% down, and it would have been nice to save up more. Now that I'll be working FT again starting this fall, we will be full steam ahead on wiping out that debt.

TGal--I wish I had someone in my life during my college days who would have told me what you just wrote. I had to use CCs to stay in school, but I *also* used them to keep up with my friends who were collecting very nice monthly allowances from mom and dad back home. When I think back on all the dinners out and new outfits that I also charged, it makes me feel ill. I had to live at home for a LONG TIME after college to pay off that debt, and while I don't regret it because it's a lesson that was hard learned and it now keeps me in the black, it would have been nice to have learned how to live within my means back then.

 

[Irishgrrrl]

We actually had BS3 finished before we started the baby steps at all, so we were all out of whack, so to speak. It was probably stupid, but I've always insisted that we have a lot of savings in the bank even though we were carrying student loans while saving up that money. I'm sure we should have paid off our loans before doing that, but I just wasn't comfortable not having the savings. (DH owns his own business, and it's client-based, so we never know how much he's going to earn in a month, that was why I was freakish about the savings.)

By the time we were married and started doing DR's baby steps the only debt we were carrying was educational loans and a mortgage that we took on right when we were married. If we didn't already have the savings, I probably would have wanted to save up three months' worth before we tackled the student loans, anyway. My loans have an interest rate of only 1% now because I've been getting reductions for consistent payments throughout the years, so a part of me feels that it isn't so bad to save up while still carrying some loans.

Now I just can't wait to wipe them out completely! And man oh man, are we going to have a party once we pay off this mortgage. A HUGE party!

If we had really read Dave Ramsay before we were married I don't think we would have bought the house so soon. I don't regret it because I LOVE it, but we only put 20% down, and it would have been nice to save up more. Now that I'll be working FT again starting this fall, we will be full steam ahead on wiping out that debt.

TGal--I wish I had someone in my life during my college days who would have told me what you just wrote. I had to use CCs to stay in school, but I *also* used them to keep up with my friends who were collecting very nice monthly allowances from mom and dad back home. When I think back on all the dinners out and new outfits that I also charged, it makes me feel ill. I had to live at home for a LONG TIME after college to pay off that debt, and while I don't regret it because it's a lesson that was hard learned and it now keeps me in the black, it would have been nice to have learned how to live within my means back then.

Haven, I don't blame you at all! DR talks about how you have to pay attention to your "security gland" and it's OK if you feel the need to pile up some savings before the Baby Steps say you're "supposed" to. And in your situation, with your DH owning his own business, I would probably feel exactly the same way!

And I soooo hear you about wishing you had found DR sooner! GAH! I wish I had a time machine!

 

[NewEnglandLady]

This is the part that I like about financial discussions--talking about the "how" of it (and I'm actually listening to DR right now--thestories keep me motivated!). We included student loans in BS2, however we sort of did BS2 and BS3 together because D and I weren't married, so I didn't want him contributing to my debt while he built the emergency fund. After we were married, that became more of a moot point. We've sinced moved on to BS5 and BS6 and that is the current debate since both of those are important to us, but BS6 is slightly more important than BS5 since we don't yet have kids.

I have no issues talking about finances because I feel like I've been all over the place. In debt and poor. Young and insecure about my debt. Living on rice and beans to get out of debt and now having a mortgage and being more in debt than ever, haha! But I've learned so much through the journey and genuinely like hearing others' stories.

 

[TravelingGal]

TGal--I wish I had someone in my life during my college days who would have told me what you just wrote. I had to use CCs to stay in school, but I *also* used them to keep up with my friends who were collecting very nice monthly allowances from mom and dad back home. When I think back on all the dinners out and new outfits that I also charged, it makes me feel ill. I had to live at home for a LONG TIME after college to pay off that debt, and while I don't regret it because it's a lesson that was hard learned and it now keeps me in the black, it would have been nice to have learned how to live within my means back then.

Haven, I think that most people who are debt free now had to learn it the hard way. I know only three people (my cousins, who are sisters, and TGuy) who never managed to get into ANY debt. The rest of us had to learn our lessons...to feel those feelings of shame and stupidity. I visited the CCC (consumer credit counseling) when I was 23. They put me on a program, but I was feeling hopeless of ever getting out of $3000 worth of debt. I got a chance that not many get...I was bailed out. One of my aforementioned cousins asked me one day why I was so bummed. I told her why. She wrote me a check on the spot for the entire amount of my debt. I was so ashamed...not wanting to take the money, but knowing it would get the collections folk off my back. I took the money, and unbelievably, worked/saved my butt off to pay her back, and did so in under 1-2 years (I can't remember exactly). Why I felt hopeful with debt owed to my cousin vs the credit card companies, I don't know. But whatever it was, it lit a fire under my butt. I knew I was lucky, and I knew I couldn't let her down. I never, ever bought anything I couldn't afford again.

I'm happy for the lessons learned. Where I feel blessed is that I learned them early, and you did too.

 

[steph72276]

I love hearing the stories of working your way out of debt. I too wish I would have gotten my act together sooner, but then again I think the lesson learned the hard way makes me work harder to never get there again. I was lucky to learn that lesson in my 20s and not at retirement age (or never!). But I will sure as heck teach my children all I can about finances.

 

[partgypsy]

In answer to your question why I clicked on the link, I'm nosy too . I know, bad on me.

I guess it was how it was phrased that rubbed me the wrong way. If it was phrased, anyone here been in credit card debt and gotten out of it? How did you do it? I would have found it less obtrusive. I personally enjoy reading personal finance stories because I feel I can always learn from them. If people feel comfortable sharing, more power to them.

Myself: in my life I have been in debt for: 10K car loan, 12K HELOC (window replacement) and up to 5K in credit card debt while in grad school (living off a 12K stipend). Current debt is I have a mortgage. I use my credit card but pay it off each month. I am lucky in that I got a scholarship to college, and my parents paid the remainder (no college loans), and that live in low cost fixer-upper house.

 

[zoebartlett]

I need to read DR. I'm a little familiar with his books, but I need to spend a good chunk of time reading them. My husband just wants the Cliff Notes version though.

 

[Haven]

I like hearing the stories too, NEL. That's why I clicked in this thread in the first place.

Irish--Thank you. I still feel a bit guilty about the way we're handling things because I feel like these student loans are just looming over me and I *could* wipe them out right now but I just can't let go of that savings. I imagine I'd feel different about this situation if I had tenure or if DH worked for someone else.

NEL--We'll face the same issue with BS5 and BS6. I REALLY want to pay off this mortgage before we do anything else, and it's going to be very tempting to roll our snowball entirely into the mortgage before we have any college funds started. We don't have kids yet, either, so that's probably part of our issue.

BS4 is interesting, too, because I'm forced to contribute just under 10% of my pre-tax income to my pension fund, so I'm not sure that an additional 15% is necessary for my own IRA. I know it can't hurt, but then I'll be putting a quarter of my income into retirement before we pay off our mortgage and that doesn't feel right. I suppose we're not doing these baby steps as sequentially as I thought because we are already contributing to retirement funds for DH and IRAs for the both of us. We are focusing the majority of our snowball into the student loans, so we're just skimming a bit off of that to keep those retirement funds growing a bit. Gah! We're not really following the plan as closely as I thought we were! But my husband is already 40, so we need all the time we can get on our side to keep that fund stacked and growing so he can retire at a reasonable age. We'll get there.

TGal--You're right, we are blessed to have learned the lessons early. I remember feeling very, very ashamed that I carried credit card debt, and it sickened me to look at the unnecessary items I bought on credit. The funny thing is, it took me a couple of YEARS after college to really reign in my spending habits so that I was truly living within my means. Those habits were hard to break, and I was shocked by my own inability to do so at times.

My summer school class just read and discussed a series of pieces about whether the American dream is still attainable in this country. Interestingly enough, a small group of my students came up with the assertion that they feel as if they have been cheated out of their ability attain the American dream by the media, and consumerism. This sparked a great discussion about personal responsibility versus lender responsibility, the media, and our consumer culture. I didn't expect the discussion to go that way, but the general feeling was that they had been tricked into buying small things that added up and didn't really matter that much, and ultimately the debt they incurred from buying those small things is keeping them at a safe distance from having the freedom to pursue their real dreams and interests. I was reminded of David Bach's latte factor, and while at times I felt like saying "Just stop spending money you don't have!" I had to remind myself that I had the exact same problem when I was their age.

Part Gypsy--I hear ya. I'm as nosy as the next person, although I try very hard not to be. It's near impossible for me, I'm sad to say.

 

[NewEnglandLady]

Sometimes I still think about how much more I could have saved if I hadn't started my life in debt. But I try not to dwell on it and just look forward.

We didn't follow the baby steps to a T, either. Again, D and I weren't married, which changed my strategy. It was really hard for me to let him help me since he made the conscious decision to never go into debt and paid his way through school. And now that I think about it, we don't contribute 15% to retirement, either. We only use our companies' 401Ks up to the matching amount, then put the rest into a Roth IRA, but that contribution is based on our old salaries and not up-to-date, so we should probably adjust that.

I think DR's plan is great for getting people to change the way they think about debt. I think anybody who's been in debt probably had that Scarlett O'Hara moment where they get so angry about the debt that they say "As God as my witness, I'll never go into debt again!" and I think that is the moment where your mentality changes. I think the baby steps and building financial momentum helps people get to that point and that is how they are most helpful. That's why I no longer feel like I have to follow the steps precisely, you know? We get it. We are happy to sacrifice now in order to gain more later.

 

[Irishgrrrl]

Haven, don't feel too bad . . . we're not exactly doing the steps in sequence either. Ya know, I think most people tweak the plan a little to suit their own needs. In fact, that's one of the things that made me want to do DR's plan . . . the fact that it can be flexible depending on each person's individual situation.

For example, DH and I have BS1 done (yay!) and we're currently working on BS2. But, at the same time, we're contributing to our retirement plans through work (7% for me and 10% for him), which we technically shouldn't be doing until BS4. But, DH has a big "security gland" when it comes to retirement savings, so this is a compromise that we've made. Also, I guess it helps that we don't have to worry about BS5 at all, since we don't have kids and don't plan to have any. So, our plan is to finish BS2 (I can't wait!!!), then finish BS3, then up our retirement contributions to 15% (plus employer contributions) to complete BS4, then we're on to BS6!

Also, we're diverting a bit of our snowball from time to time to fix up our 100-year-old house. We want to sell it within the next two to three years and build a house on some acreage in the country. In order to make the house marketable, there are just some things that NEED to be done! I've gotten some flack for this on a DR message board that I sometimes visit, but I know it's what's right for DH and I under the circumstances.

 

[partgypsy]

Irrishgrrl: "In fact, that's one of the things that made me want to do DR's plan . . . the fact that it can be flexible depending on each person's individual situation." Don't tell Dave Ramsey that!

Since becoming interested in personal finance I've read a number of books including Dave Ramsey. There are some in the personal finance community that don't like him (he says to pay smallest balance first which may not be mathematically optimal, overstates stock market returns) but he doesn't bother me because he motivates people to make positive change in their lives. I also thought it was neat he made those Chick fil a books for kids that had different financial responsibility themes. I think there is a dearth of information out there directed towards kids, teenagers and young adults so they can avoid some of these mistakes. For example I think it would be awesome for there to be a personal finance class in high school. Heck I think our current senators and congressmen could use a class in budgets.

 

[lilyfoot]

Haven, NEL, Irish (and whoever else ..) I just wanted to jump in and say that I'm a DR fan also. The only debt we have are our car loans, which are reasonable, but hearing about the "snowball" effect intrigued me to research more on DR. I've been reading his More Than Enough workbook every day, and have just started working the Baby Steps as well. (There's a lot of "I" in this post instead of "we" because I'm the main money-handler in our marriage. My husband is obviously in agreeance with everything though )

We are pretty young, I'm 21 and my husband is 24, which excites me even more because I know we have longer than the average person to save money/contribute to retirement (which we already do - but not enough), etc.

We have both dealt with pretty massive consumer debt, before we got together, and getting into debt is not a mistake we are willing to make again (except for a mortgage). Honestly, if I told you what we have been through, you probably wouldn't even believe me, we have been to very big extremes with debt. But I know we are lucky to get a "restart" so early in life

 

[zoebartlett]

Haven, NEL, and TGal, I have to say, I envy you. We have credit cards and we've used them on occasion, but I hate them. I agree with those who said that stuff happens and things come up. If you don't have the amount of saving needed to cover the expenses, how else are you going to get new tires, pay a doctor's bill not covered by insurance, or ...? Those are just examples of course. We don't use our cards for frivolous purchases, but things come up once in a while. I'd love to be in the position you're in.

 

[Haven]

Haven, NEL, and TGal, I have to say, I envy you. We have credit cards and we've used them on occasion, but I hate them. I agree with those who said that stuff happens and things come up. If you don't have the amount of saving needed to cover the expenses, how else are you going to get new tires, pay a doctor's bill not covered by insurance, or ...? Those are just examples of course. We don't use our cards for frivolous purchases, but things come up once in a while. I'd love to be in the position you're in.

You will be.
Despite the fact that it took me a couple years to really grow up and stop buying unnecessary things on my CCs right after college, you'd be amazed by how much you can start saving once you really take a good luck at what you actually spend. When DH and I married, I thought I was frugal until I tracked every single penny we spent for several months. Oh MAN were we spending more than we needed to. We made a few small changes that added up very quickly, and then once we started seeing the difference we were motivated to make even more changes, which meant more money in the bank. It sounds like you guys are already beyond that emotional spending habit that I took so long to kick, so you're well on your way.

I actually found our favorite dinner recipe on my quest to cut our grocery bills in half, and then that made me want to find even more cheap, delicious meals, for example.

And in case anyone IS stuck where I was, which was spending money on things I didn't need even though it made me feel awful and guilty, this is how I finally stopped: I made a list of everything I WISHED I could do or have on a regular basis. I really had to evaluate my priorities and values, and I realized that I couldn't do some of the big things I really valued (like travel to Europe every summer) because I was throwing my money away on small things that didn't mean so much to me, but added up really quickly (like eating Chipotle once a week.) Once I started looking at that burrito meal as $9 that could have gone into a vacation instead of lunch, it was much easier to stop spending. Of course, I had to pay off my debt before I could even think about going on vacation, but I was $9 closer!

 

[TravelingGal]

Haven, NEL, and TGal, I have to say, I envy you. We have credit cards and we've used them on occasion, but I hate them. I agree with those who said that stuff happens and things come up. If you don't have the amount of saving needed to cover the expenses, how else are you going to get new tires, pay a doctor's bill not covered by insurance, or ...? Those are just examples of course. We don't use our cards for frivolous purchases, but things come up once in a while. I'd love to be in the position you're in.

Zoe, I think first, you have to hope that you can get a jump start on the disasters (or semi-disasters) which happen in life. The cousin I mentioned before made under 30K for her first job, and saved 12K in cash that first year. She chose to live at home, even though she felt it was embarrassing (but she's lucky she has parents who allow this). She's never made much more than that, but always saves a similar amount, even though she now lives on her own. She only shops at discount stores when she needs something and buys shoes that are $10-$15 at Ross (and looks very hip, btw). She's very very smart when it comes to money. If one was to look at their spending habits, I think one could find lots of ways to save. I look at my cousin's spending habits and there's almost no place to cut more corners. She has an area or two she splurges (she loves movies, so she spends money on that kind of stuff), but other than that, it's a very frugal life.

 

[Irishgrrrl]

Irrishgrrl: "In fact, that's one of the things that made me want to do DR's plan . . . the fact that it can be flexible depending on each person's individual situation." Don't tell Dave Ramsey that!

Since becoming interested in personal finance I've read a number of books including Dave Ramsey. There are some in the personal finance community that don't like him (he says to pay smallest balance first which may not be mathematically optimal, overstates stock market returns) but he doesn't bother me because he motivates people to make positive change in their lives. I also thought it was neat he made those Chick fil a books for kids that had different financial responsibility themes. I think there is a dearth of information out there directed towards kids, teenagers and young adults so they can avoid some of these mistakes. For example I think it would be awesome for there to be a personal finance class in high school. Heck I think our current senators and congressmen could use a class in budgets.

PG, that's very true! He does get a little bit "hard core" at times. But, I'm not one to follow every word ANY financial guru says as gospel. I think DR's plan gives us a guideline as to how we should tackle our finances and in what order, and we can use our own common sense to make the plan work for us. A one-size-fits-all solution doesn't work for everyone. I think DR comes down hard on his show on people who don't do the Baby Steps in perfect order because he wants to make his message VERY clear to those who are watching/listening. He also talks about how one spouse might have a larger "security gland" than the other spouse, and exceptions need to be made in those instances. He doesn't want people to get so focused on improving their financial lives that they wind up neglecting their marital lives and getting divorced! LOL!

And I agree with you 100% about the lack of education that kids get in school when it comes to personal finance. I think that's awful. I know I didn't learn any of this stuff from my school or my parents, so I had to basically figure it out as I went along.

Lilyfoot, I have the same situation as you. I'm the one who manages the checkbook and pays the bills, and DH just says "whatever you think is fine with me, honey!"

 

[NewEnglandLady]

Zoe, I can completely relate to how frustrating it is to lose momentum over an emergency. When I started getting serious about saving and paying off debt, I was in my early twenties and not making much, so for me to save money was a challenge. DR's baby step #1 is to save $1K as a mini-emergency fund. Then baby step #2 was to pay off debt completely (except mortgage). This simply wasn't feasible for me--it was going to take me years to pay off my student loans and a $1K emergency fund couldn't carry me through all of that. I needed to save for a car, I wanted a bigger cushion than $1K, etc. So I tried to find a balance between saving and paying off debt. I just tried to use his principals to get me there, even if it wasn't by the book.

Having a separate emergency fund is a must for me because I lose momentum and get depressed if an emergency sneaks up on me. I remember when I was a sophomore in college I was saving for a car because I needed one when I graduated college and got a job. I'd just saved my $1K emergency fund (BS1) and had saved another $1K for the car when I spilled soda on my laptop and ruined the keyboard. The repair came to ~$500 and I remember feeling relief because I wouldn't have to take it out of my car account. For some reason, that made a difference for me. I still stopped saving for the car and refilled the $1K emergency account, but I didn't feel the same loss of momentum. By the time I was a senior in college I had saved enough to pay cash for a cheap car and we still drive that car as our primary vehicle (if we don't have the dogs) to this day. It has 200K miles on it and has been with us through lots and lots of saving--but we've never replaced it!

I still find the value in an emergency fund with 6 months' worth of expenses that is completely separate from savings for the same reason I valued it a when I was a poor college student. Murphy's law, right? As I mentioned in a previous post, we'd been saving for a house for a LONG time. And naturally, as soon as we put in an offer, several emergencies popped up at once. We had to pay over $7K in taxes this year when we'd never owed in previous years. Byron lost vision in his eye and we've now spent over $15K trying to get vision back (to no avail). If we didn't have a separate emergency fund, we would have either had to find a way to back out of our contract or we wouldn't have been able to put as much down as we wanted. Emergencies are stressful enough themselves, so I was very relieved not to have to worry about the financial ramifications of these emergencies. I value our emergency fund very much. It helps me keep my sanity!

I will say for me, personally, debt was only half of my equation. Obviously working on debt was a priority of mine, but I also really focused on increasing my income. I started working full-time in college to help save. After college I went into a field that I thought would have good long-term earning potential. I intended to marry a rich man Kidding! I find mine and DH's income to be our biggest wealth-building tool (obviously), so I'll be honest and say that it is important to me.