I admit it. We do cheat on our “Dave” plan.
For anyone who has been following me here at A Dime at a Time, you know that my hubby and I are digging our way out of debt via a slightly modified version of the Dave Ramsey baby steps. We are currently on baby step 2 which is all about paying off debt. While the math doesn’t always support it, Dave recommends doing this in the order of smallest to largest. I’m good with that, even if the math doesn’t always make sense. There is truly a feeling of winning when you do pay off that first debt, regardless of the interest rate. Lately, though, my hubby and I have been cheating, even above our modification!
As for our modification, we did not stop our contributions to our 401K, and this goes completely against Dave’s plan. When we started our journey earlier this year, initially we were going to pull the plug on our retirement savings. But when it came right down to doing it, neither of us could! Has it hurt our snowball? I’m sure it has, but we also take comfort in knowing that we are still saving for the future. Despite this modification, we are still making progress!
Another area we cheat is in not always directing every extra dime to our smallest debt. I am sure many die-hard Dave Ramsey fans would argue that we are cheating ourselves out of the psychological rush of paying off a targeted debt, but we make up for it in other ways. The majority of our snowball remains directed at our smallest debt, but when it comes to paying the bills, I like to round up. Nothing too extreme, usually just to the next $25 increment. For example, if the minimum payment is $79, I make it $100. Call me weird, but I find oddball numbers messy! Plus when it comes right down to it, doing it this way makes the math a lot easier! I also feel a win (even if only a small one!) in knowing that we are paying above the minimum on all our debts.
Then there are times we take our “round up” to yet another level, even above the $25 increment. We occasionally do this to reach what I like to refer to as our milestone wins. Our milestones wins are increments of $500. If our Visa balance is $5,579, I’ll do everything in my power to get it below the $5,500 threshold. We have five remaining debts left to pay off in baby step 2. Honestly, even with having paid off over $7,000 since starting our journey in January, it often feels like slow going. I’d be lying if I said otherwise. Our smallest debt is now a smidge below $5,500. With that debt being that high, it isn’t going to go away in a matter of a few months time. By periodically reaching these milestone wins with our various debts, hubby and I do feel a psychological rush, and it encourages us to keep going.
So, yes, we are cheating on the Dave Ramsey plan, but we are also still winning! Paying off debt is hard work. I don’t feel there is necessarily a right or wrong way of going about it. What works for one person, won’t always work for another person. What ultimately matters is keeping a warrior mentality against the debt and winning the battle!
Are you “cheating” on your plan to pay off debt? What are some things you are doing differently or may have done that have helped you in your journey to get debt free?
*Disclaimer: I am not a financial advisor nor a professional in this area. Writing this blog is my way of sharing how my hubby and I are digging out of debt in our 50s, A Dime at a Time. My hope is that in doing so, others will realize that they are not alone and that it is never too late to start their own journey to get out of debt and take control over their own finances.