“Step one is the baby emergency fund. That is the one I am talking about, while people are trying to get out of debt(not mortgage). Dave wants you to be uncomfortable. If you are happy and comfortable then you are going to take longer to pay off your debt. That is why he says to sell everything. Once you pay off your first debt you get a “high” which makes you work harder to pay off your next debt . And it just keeps going. If you are putting some in saving and some in retirement and some towards debt it will take you 3 times as long. His plan really works. It is HARD! It is UNCOMFORTABLE! That is the point. You will never want to go back into debt.” ~ Marybeth
The above quote is from a comment left by Marybeth on the blog post regarding how much to keep in a starter emergency fund. The part about “It is hard! It is uncomfortable” struck a chord with me as I feel this can apply to other steps of the Dave Ramsey plan, too. In our case, it is baby step two. [Read more…]