So, I’m finally trying the Total Money Makeover. Yes, I know that it makes more sense to pay higher interest rate balances first, but since my interest rates all vary, I think the stable balance is a better thing to track.
I refuse to give on the baby emergency fund. $1000 is not enough for us. We have variable income, and Murphy’s law would kick my arse at that amount. We’ll be keeping $2000 in the emergency fund.
Other than that, we’ll see how it goes. I know I’m coming late to the party, but I’ve been listening to the Dave Ramsey show online, and I’ve found it motivating. What I particularly appreciate is the communication it requires between couples. I’m not always good at making sure my husband and I are on the same page, now I have forms and tracking sheets that he can see at any time. They’re not just my spreadsheets anymore! We’ve been on it a week, and we already paid down an extra $60. Cheers!
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We have been doing it for almost two years and are down from $90+ thousand to around $28 thousand. Our baby fund is slightly larger, as well, because my hubby's job has been doing so many layoffs. We haven't followed the smallest every time either depending on balances and interest rates. I've gone with my own judgment but I've had several balances that are pretty close to each other. If we had followed the program exactly we would probably be debt free already but life isn't so simple. Good luck!! Not easy but so freakin' worth it.
I don't Dave Ramsey would object to a $2,000 baby emergency fund. The point is to have it big enough to meet the needs of the majority of unplanned expenses so you could focus on paying down debt.
@Junebug: That's incredible! In two years? I'm aiming just to get out of credit card debt in the next three. (Student loans are a horse of a different color.) All our interest rates are within 2% of each other, but when I get the chance I do a balance transfer (usually with an offer on a card we already have). I'd rather not pay the man anymore money than I have to.
@Bucksome: Thank you. When I was first introduced to Dave Ramsey, I thought he was a little, well, dogmatic and off his gourd. It turns out it was the person who adored Mr. Ramsey who was a little off. After listening to his radio show for the past couple months I've heard how he modifies TMMO for individual situations; his approach makes sense and it's not without flexibility. In his book there's a line where he said, essentially, doing it your way isn't working so why don't you try mine. Hard to argue with a reasonable request like that. The slightly larger BEF will allow my husband to take a sick day when he's sick without panicking. I can't put a price on that.