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.
I don’t think of you as “cheating” on your Get Out of Debt Plan(a la Dave Ramsey). Cheating denotes something negative. Cheating on a diet, a spouse, taxes …..all “bad” things.
I’d prefer to think of your modification on Dave’s plan something like a Tweaked Dave Ramsey Plan or Dave Ramsey 2.0.
You are taking the battle in your own hands and tweaking how you work the plan that works for y’all.
When we had(tho it was a small amount)debt I didn’t feel the need for the psychological win of paying off smallest to largest. I’m a numbers gal so I went from highest interest rate to lowest to get it gone but I see why some folks do it the Dave way.
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You are so right, but to those “die hard” Dave followers, I’m probably breaking every rule in the book! As long as it gets the job done, that is what matters! Lol
You a numbers gal? I had no clue! Ba ha! I actually admire how you detail every area of your finances! You are truly a Budget Queen!
Baha! Everyone is a smart A$$……hehehehe
Sluggy recently posted…Getting Closer…..
You know it! Lol
Sounds to me like you are adding to Dave’s plan 😉 The end result is what matters and you are getting there!
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It’s kind of like adding some seasoning, to what otherwise would be a very bland financial diet! Thanks for your encouragement!
I have always played “mental money games” Paying off debt is BORING so having games help just a bit.
It is boring, isn’t it! So much we can’t do (or won’t do!) because right now it all goes to debt. May as well try and have some fun with it by making it a game.
I think you are doing great with your approach to paying off your debt. And I really love having everything be in round numbers. If I can help it I do the exact same thing when paying things off. Easy math for the win! 🙂
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Easy math makes it well, all the easier! Thanks for stopping by!
I think you are making Dave Ramsey work for you. He gives a lot of common sense, but you are in a different situation than someone he counsels in his 20s or 30s, I would keep adding to retirement also. Keep plugging, I think you have a lot to be proud of. 🙂
Thanks, Chris. I wish Dave would offer more advice for those of us working the plan later in life. I’m sure there are more of us in this situation than like to admit.
Lucy, I would so agree with this! I am just glad to have found your blog. We are in our 50′ s, trying to pay off debt, while trying to get two kids through college. We have a plan now, but it’s not moving fast enough for me because “life” always gets in the way. I like your idea of rounding up payments!
So glad you found me! Sadly, I am fairly certain there are a lot more of us battling debt in our 50s than we hear about. I hope this blog serves as some encouragement. Let’s cheer each other along! It does get frustrating at times, but I remain confident that with a plan and determination, we can reach financial freedom. Don’t give up. It is never too late!
Guilty! I’ve definitely modified the Dave plan to work for our situation at times. I also round up payments to an even number, and agree it keeps the math easier. We’ve done a lot of DR no-no’s, like financed a vehicle, but it worked for our situation. DH didn’t stop retirement. We figure since I don’t have any, he might as well keep contributing. DR teaches common sense, and I know the die-hard followers would be appalled at the things we’ve personally chosen to do, but DR isn’t one-size-fits-all.
I agree that the Dave plan isn’t a one-size-fits-all. I’m a stalker in a Facebook group of die-hard Dave fans. I’m sure they’d give me the boot if they knew how I’ve modified the plan. Retirement concerns me and I’m sure it would concern me even more if we stopped contributing.
Me too! I bet we’re in the same group. I see people getting kicked out left and right for the most minute comments. Crazy DR fans scare me in that group lol.
Wouldn’t surprise me if we were in the same group. I hide in fear of being kicked out. Lol.
heehee I play these little games too. Our mortgage payment is something like $1428.xx. we autopay a flat $1500 (I Loooove those round numbers) out of my husbands account. Then, once it clears, I look at the principal amount owed, and pay a portion out of my account that rounds that down to an even number (rounded to the nearest $500). It’s not a whole lot, but the interest rate is super low 2.65% so I’m not really in a rush to pay it down super fast. but a bit here and there is not a bad thing and I get to play with numbers that much more 🙂
I’m raising my hand with that, too! I know there will come a day when we are snowballing our mortgage and I figure at that point, it will just mean we have less to pay! Playing with the numbers is actually kind of fun and that $500 number…it feels almost magical! Lol
My wife and I are “cheating” in that we’re not as crazy gazelle-intense as he would probably have us be. We just don’t have the kind of income to be able to pay off our debts in two years like he wants, so we’re looking at Baby Step 2 as more of a marathon than a sprint. When we have unexpected windfalls (like Rachel’s next paycheck being significantly higher than expected), we use most of them to pay down our debt, sure, but we’re also setting aside some for a date night and some new clothes that she’s been wanting. I just don’t have the heart to force us both into a life completely devoid of luxury for the next 3-4 years in the name of “living better.” Maybe I’m just young, but that seems pretty counter-intuitive!
You are making it work for you, and that is what ultimately matters! Life is a journey, and you should still enjoy the ride! Even if it takes an extra year or two, you will still reach your financial goals! Congrats on how well you’ve already done. I am thoroughly enjoying reading your blog! Very insightful!