I don’t understand the point in savings challenges while paying off debt. If ur debt is crippling then I say put every extra cent possible towards it. Keep a little nest egg for emergencies but build it up after the debt is paid.
For me putting money in savings will help me avoid debt in the future. As someone with variable income, I can't just rely on my paycheck. That's why I need some extra in savings while paying off debt. And I wouldn't say that I have crippling debt, I can make all the payments and a bit extra. Just a matter of when I pay it all off sooner or a bit later! Thanks for watching.
Also, if an emergency happens you want that padding. I just had what was supposed to be a simple surgery but ended up with internal bleeding that put me back in the hospital for multiple days. I had an ambulance to one hospital and then had to be airvacc to another hospital for emergency surgery. I hate to think how much that is going to cost me.
@@lorettacarroll6015 emergency funds make perfect sense to me. I see emergency funds & savings as two different things. I didn’t know if this was savings or emergency funds.
I followed Dave Ramsey's baby steps, paying off over $100k in debt in three years. It was very painful. Other than $1,000 in emergency savings, everything went toward debt. I did learn having debt was basically me giving away my money to other people...every transfer fee, late fee, and interest was just dumb money planning on my part. The real fun comes when you are able to start saving and investing. I got diagnosed with cancer, and trust me when I tell you it made the experience so much less stressful knowing I could pay cash for my deductibles and alternative treatments. Being out of debt is true peace of mind. Until then, it's just shuffling the cups around to do balance transfers and putting debt back in new ways. So my vote is put every penny toward debt and never ever buy something if you don't have cash to spend on it. Good luck yo you and your husband!
Wow, thank you so much for sharing your sorry! What a journey and that is incredibly inspiring. 👏 I agree that having no debt helps so much with peace of mind and reducing the stress. A few years ago we had over $100,000 of debt too so it's been a long road. But we're nearing the end and have a plan to be debt free except the mortgage by the end of the year! 🤞
Same for me as @lisadawley, had $35,000 in debt and it took two years to pay off - - very painful having to put every spare dollar, overtime, and bonus to debt but I had to keep telling myself I had no choice. It seemed like it took forever but I learned my lesson and don't charge any more.
Thanks for watching! We have $150k of equity in our home and I'm in the process of selling one of my businesses for more than that amount so this will set us up to be debt free except the mortgage by the end of the year!
I’d put ANY savings I had into that high interest debt and forego the savings challenges completely while keeping a minimum emergency fund (1k) until all debt is paid off. I hope you won’t even consider buying an upgraded home until your debt is gone also. It would be a burden not a blessing. And you can’t borrow your way out of debt. Ever. Good luck!
Thanks for the input! We sold our current home this past week and used the proceeds to pay off the high interest debts. Now we just have the 0% payments till 2025, so we're sitting pretty for the next home. Definitely don't want to bring in debt with a higher mortgage, that wouldn't be smart at all! Thanks for watching.
@Jesus-kt5dc Zero percent balance transfers only work if you have the money and the discipline to pay them off before the introductory period ends. They’re counting on you NOT doing that. After the intro period, interest rates usually skyrocket to some of the highest. And if it’s zero percent to transfer forever… that’s STILL debt. Juggling from one card to the next isn’t paying anything off. And your 1k emergency fund should be in a high- yield savings account. Mine’s making 4.5% interest currently. Money to put towards debt payoff shouldn’t touch the emergency fund. If you have an emergency you use the emergency fund (plus the extra from interest it’s been earning if need be) and pause the snowball until you replenish it. If you keep using credit cards as a crutch you’ll never be debt free.
Great job in paying off what you were able. It hurts though , right? I remember when I had 35k and it took me 3 years to pay off. I learned my lesson after that. I’m completely debt free including home and car and it’s such a great feeling. I was finally able to save 10k in savings, and I don’t charge anything at all now. Good luck on your journey.
Yaaas!! It hurts a lot but it makes you want to save up and pay everything yourself, just as you're doing. It's going to be such a great feeling debt free except the mortgage by the end of the year. 🤗
If you are using savings challenges towards debt reduction, i STRONGLY advise that you physically empty your envelopes on a monthly basis and apply it directly against your debt balances; especially a ~28% interest debt. Do the challenge, the coloring/ scratching, and a monthly accounting sheet. But transfer that money asap onto debt.
Yes, this is great advice and we are doing just that with our savings challenges. Although, since we sold our current home we've already paid off the 28% debt so it's just the 0% to pay down now using the savings challenge money! We're in a good spot now for our next dream home! Thanks so much for watching.
Happy Sunday 👑 & very transparent with your update🎉 I know it is not easy to share our debt but it's the beginning of everything to tackle it, great debt confession video 👍
Very smart to get the IRS debt transferred. IRS is the scariest of all debt to carry. Please please make sure that you have your annual taxes due vs take home pay situation sorted out before upgrading the house. More unexpected IRS debt arriving on top of a higher mortgage and less home equity would be a tough situation to maneuver through.
Great point and good tip! Yes, I'm in the process of selling one of my side businesses cause I definitely don't want to have a large mortgage plus tax debt. Also, once everything finalizes with the new house it will be my only debt left!
We also followed Dave Ramsey but retained a $10k emergency fund in the process of paying off $47k in consumer debt/ car loan in 18 months. First step is to commit to not going back in debt. We will have our last remaining F150 truck paid off in June. Next step is to fully fund the emergency fund. After that increase retirement savings to 15% and then pay off our refinanced 15 yr 3.75% mortgage that has a current balance of $146k with a home market value of $460k. We also track every dollar in our monthly budget. We sit down and pre plan up coming expenses or repairs each month. Budgeting is key to making your money behave. Our house will be paid off on about 2.5 years. Best of luck in your debt free journey-it will change your life
Great strategy! And I agree about not going back into debt. This has been a big thing for the hubby and I. First step was to stop using debt/credit cards and get our spending under control (live within our means). Now it's onto saving for what we want and becoming debt free. We're on the right track! This year we hope to be debt free except the mortgage and have plans in place already to accomplish that! It's such an exciting feeling to pay off a car loan! Big congrats on that this year. Woohoo!!! Sounds like you're on the right track too. We can do this! Gotta keep going :)
Great update, isn't it amazing what we can do when we are intentional. Did you guys change your tax exemptions so you won't owe so much in taxes? I'm just wondering what other adjustments your making where you can?
Oh yes for sure! Putting your mind to something and getting it done is such an amazing feeling. Agree, great tip about the tax exemptions, we've updated them for this year and should be on track for the future. No more tax debt for us haha
I like the accountability it’s rare these days. I have 14k in car debt and pay all my cards off in full every two weeks when I get paid. What are some of the key takeaways you can share with us in avoiding consumer debt?
Thank you so much for watching! Yes, it's hard to share all of my debt cause it's not always pretty. I also pay off my credit card every two weeks in between cash stuffings. I use the funds I save in envelopes for variable expenses to pay off those categories. Cash stuffing has been a HUGE strategy towards paying off my debt and getting spending under control. Highly recommend that strategy! Saving up the cash really helps avoid future debt. Another thing I've always done is to save up about half of the funds I need for a new car, and then get an auto loan for the rest. This really helps to make it an affordable purchase!
We do not particularly have any debt. We have had times of EXTREME lean and times we've felt pretty flush. My advice is to start paying attention to some of the frugal living, minimalist, and zero waste channels for ideas on how to cut what I call "operational exoemses". These are the things you spend your money for your general daily and monthly living. Its handy in times of lean, when saving up for a financial goal or toy/ want, and let's you spend more purposeful "want" money. Being purposeful is another tactic and playing the "this or that" game. For example, do I truly want a proverbial Starbucks on the way to work and then also on the way home for $5/ ea, $10/ day, $200/ month or would I rather spend $200 per month on something else; assuming the money exists in the first place and even if the $200 is spent on a different pure want? Budgeting has a negative connotation for many but, establishing a budget for say things like gifts keeps you within reason. Then the fun and the challenge begins to find great things within the budget. I see so many people with 20 to 50 envelopes for discretionary spending. While not using envelopes, we've always had fewer things we were saving up for, purchased them one at a time, and then went on to the next. We seem to get more things sooner; or at least it feels that way. We also make what we call "investment purchases" along the way. These are things purchased with the idea that they will save money. These would be things like CFL light bulbs, power strips, cloth kitchen towels, a thermos for coffee on the go, food storage containers for use in the kitchen and onnthe go, and our rain water catchment system.
Oh yes for sure! We got behind one year and then it just kept stacking up. You know how it goes! But we're caught up now and don't owe them anything more thanks to paying off 0% for the next year. It's a good feeling!
Where do the IRS debts come from, just curious? I’m working on paying off 44k of credit card debt. Moved most of it to 0% cards and my buddy loaned me 18k to pay the rest so I could get rid of the interest every month
The debt from taxes is from not paying enough towards the IRS for 2022. Back taxes owed. Good luck on paying back your credit card, I know we will get there!!
