“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.
The current balance in our checking (which is not our baby emergency fund) is $1,603. The remaining balance on our smallest credit card is $1,500. With no bills due this week and no outstanding checks to clear, I could pay this credit card off today. While I have let our account get low, I’ve never let it get quite that low! Hey, it’s uncomfortable…but, I also want this debt gone!
For the record, I’ve been putting every dime I can into this account with the intention of getting this debt paid off. No, May’s envelope system is not quite fully funded, but May isn’t here yet, either!
I’ve decided to go for it! To again quote Marybeth, It is HARD! It is UNCOMFORTABLE! That is the point. You will never want to go back into debt. Oh, how right she is. I NEVER want to go back into debt again!
What about the rest of the month? There will be several uncomfortable days until we get paid again, but I remind myself that being in debt is also anything but comfortable! We will survive! We use cash for day-to-day purchases, so no worries about overdrawing our account.
The final payment for that credit card will come out of our account tomorrow, and then that debt will be gone forever! Woohoo! Another debt paid off makes this icky feeling all worthwhile.
So now I’m curious. How low do you let your checking account (or whatever account you pay your bills from) go? What makes you feel uncomfortable?
I’m not great with uncomfortable….I use YNAB so I zero-dollar budget, but I always have a buffer (it is actually categorized “buffer”) because I’m trying to get to where we live on last month’s income. We have about $3,000 in our savings account and there is $500 in the buffer right now. I don’t think I would be comfortable with any less – last month, for instance, I evidently shut my brain off and paid the mortgage twice….if we hadn’t had that buffer in there it would have been a catastrophe so I think $3,000 in savings and a $500 buffer in savings is the very lowest I would feel comfortable/uncomfortable with.
GREAT JOB paying off that credit card – you’ll never have to think about it ever again!!!!
I tried YNAB a few years ago. I do better putting our budget on paper. I can’t remember the last time our account was this low, but it sure feels good having that credit card paid off!
Awesome. You did it! You will get thru April and May and every month after. But you will never have that credit card bill again! I am so proud of you and Dave would be too. Next month when you go to pay your bills you are going to LOVE it because there is now ONE LESS BILL. That is huge.
I remember very well that pit in my stomach and whether or not I should put everything towards our debt. I just couldn’t stand living day to day with the debt so we said we would give it 6 months and see if it worked. It did. We put EVERY LAST PENNY every month to our debt. We are now debt free except the mortgage and have a fully funded emergency fund. Every penny now goes to the college fund. I can not wait until we start attacking the mortgage. I know it is a while away and that is hard for me but when the kids college is done then here we come Mortgage!
Thank you! I am super excited and eager to tackle the next one! We won’t have college to save for (kids are grown) but I’m also just as eager to attack the mortgage!
Because I get paid bi-weekly, it is hard to say how low I am comfortable. Right now, my comfort level is to have minimum $100 in my check account per pay period. For savings, at the moment I have $90 saved after emptying it out to deal with the recent emergency crisis. So, I am working hard at saving every thing I can to get that back to $1.000.
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Hang in there, Rhitter. You will get there.
I think that’s great! Do it do it do it! Paying it off is going to feel wonderful.
Yesterday our checking account balance was at $40. I shifted $100 from savings just to be safe – but then I was like, Safe from what? We know where our money needs to go, and when. Technically $40 could carry us into Friday (payday!) But I guess I get nervous when we’re below $100.
The 76K Project recently posted…Debt: Nobody Said It Was Easy
Thank you! And yes, it does feel great to have this paid off! I’m with you on being nervous. But, we are also telling our money what to do!
When I paid off my student loan, I took almost $1,700 out of savings just to go ahead and pay it off. It dropped my buffer in my checking account down to $8,000 (and I still had another $4,000 in my online savings account), but that made me very uncomfortable!!
Until our debt is gone, I can only dream of having that much in our accounts! Good job!
Good for you for getting uncomfortable and paying off that debt! You are going to be so happy to have it GONE! This post has me thinking a LOT about what I am/am not comfortable with and I just don’t have an answer as to how “low I could go” yet. With the recent promotion/salary increase my husband received at work recently, I have a fair deal of revamping to do to our budget…..including how much/quickly I can get rid of our two credit cards and leftover medical debts. I just keep reminding myself that the quicker I can get rid of them, the easier it will be to sleep at night! =)
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