Timelies all!

Not sure if there will be a holiday party where I work. Our group is small, but not very social. There used to be a big party for everyone in the building, but they didn't do that last year...

The hardest part is remembering NOT to rack up any more debt once you get out from under the multiple credit card payments.

This is mostly why Dave Ramsey does not recommend one big loan to "pay off" everything. Instead, he recommends the debt snowball, whereby you list all your debts smallest to largest (regardless of interest rate), make only minimum payments on all debts, and throw any extra money toward the smallest debt. Once that is paid off you take whatever minimum payment you were making on that and add that to the next smallest debt's minimum. And so on.

His argument is that the psychological/motivational effects of paying something, anything, off outweighs any technical benefit you get from mathmatically lower payments. And that helps you build momentum to get out of debt, save, etc.

Bah. My parents' home town is supposed to get 6-10" of snow tomorrow. I'm driving there tonight (before it snows) and coming back on Sunday, when the only thing on the forecast is "ice pellets."

His argument is that the psychological/motivational effects of paying something, anything, off outweighs any technical benefit you get from mathmatically lower payments.

I've heard this argument, but I'm not sure it works for the position we're currently in. To me, it's more motivating to have a loan, and to know that if we keep making our monthly payments it'll be gone on a certain date, and that right now we can start putting money aside to have an emergency fund. It makes all kinds of things I'd like to do, like have another child, buy a house, take my Summer 2015 European Dream Vacation, and not die starving and alone surrounded by cats, seem like actual possibilities, and that I won't spend the rest of my life being punished for the mistakes of the past 5-6 years.

ETA IMHO it's the sheer open-endedness of the credit cards that both gets us into trouble (because there's always room to put one more little thing on them) and makes it seems like it's impossible to ever get free of them.

Well, his is a pretty extreme I-want-to-get-out-of-debt-now method. You have to be pretty hard-core, i.e., with a written beans-and-rice budget. The stories I hear about how much people are able to pay off with this method are truly inspiring though.

Once you set up the first baby $1000 emergency fund, everything goes toward debt. Anything you have in the bank above $1000 should go to the debt. You shouldn't save or even do any retirement funding until you are completely out of debt (except for the house).

I'm being pretty good about the budget, but I still can't bring myself to give up the extra little cushion I have saved. And I can't bear to not get at least the 401K match so I'm doing that.

Not getting a 401K match is like giving away free money.

I admire the hard core dedication it takes to get out of debt but I just don't have it. We always have some debt floating around besides the house and a car payment. I just try to not let it build up to worrisome levels.

Wow. It's really nice to live in a place where, if the forecast calls for 6" of snow, people aren't running around like chickens fighting over the last loaf of bread and roll of toilet paper in the store.

Yeah, it sounds like just a different approach, and probably not the one for where we are in our lives right now. I mean, one thing I find kinda freeing about the idea of a loan with set payments is that we *would* be free to save for other things, go to baseball games, buy books, etc. as long as we could pay cash for them.

And I can't bear to not get at least the 401K match

Not getting the 401K match is throwing away free money.

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Not getting the 401K match is throwing away free money.

I agree, believe me, hence why I am only semi-following his system.

But I think that for the majority of people that he deals with, it is much more important to break the spending cycle by getting entirely out of debt.

For too many people, if you have any debt at all, it's just incentive to add more.

He's also against all credit cards.

The other thing I like about the idea of a loan, assuming a credit union approves us and all, is I feel like it would help me forgive myself for getting into this mess in the first place. I've gone through cycles of self-loathing over this that you wouldn't believe, but I feel like if I could just get the debt off the credit cards and onto a loan with a fixed term, I'd feel like, to put it in theological terms, that my penance had been set and I could just pay it all off and then go and sin no more. And by being able to build up a few thousand in a safety cushion, we wouldn't be in the position where every time something breaks we have to drive the debt higher, because we'd have cash on hand for new tires or to replace the laptop or what have you. I just hope it works and we can get the loan, because, to continue the theological analogies, I'd feel like I'd gone from Hell to Purgatory. And Purgatory is OK because it has an end date.