r/DaveRamsey

My original plan has been to use a credit card in the meantime, and start the transfer from my HYSA to my checking account. Once the money is transferred, pay off the card immediately. But I still somehow end up with phantom Taco Bell and DoorDash purchases at the end of every month. What is a solution to this where I can keep my emergency fund in a separate bank (because better interest, and I’ll spend it if it’s too easy to access), but be able to use it if I ever need it?

EDIT: The “phantom” is me, and the purchases seldom go over $100. I’m simply noticing that having the card means I spend more than I should. Thank you to everyone who is responding with actual tips to the original question and not doing their best Dave Ai impression.

EDIT again: STOP GETTING HUNG UP ON THE DAMN TACO BELL ABD DOORDASH COMMENT. That was kind of a joke, and I’m NOT wandering out of my HYSA for fast food. What I am saying: I currently keep credit cards for emergencies, but I will often spend small amounts regardless. I am not a credit card person. How do I keep an emergency fund of ~$20k at separate banks? If I need all $20k in an hour, what do I do since most banks will not approve the transaction immediately? If it still isn’t clear, let me know. Thank you to everyone responding professionally

Hi all! I have a question, and I'm wondering if Dave has already answered it (or a version of it) on his show. Feel free to direct me to clips if you know of any, or let me know your own thoughts.

The question is basically, what would be the best way for a family to build wealth assuming homeownership is not an option?

The reason I'm asking: my husband and I live in Brooklyn, NY with our 3 kids, and we're like 90% sure we're going to move to another state in about 8 months because our chances of ever owning a home in NYC are slim to none, especially if we follow DR's advice and don't let ourselves be house poor 😆

But if it weren't for that cost-of-living/homeownership consideration, we would really prefer to stay in Brooklyn! My husband's entire family is here; our kids have all their friends, church community, etc. And we generally like it here. So a small part of me is wondering: what if we just stayed and accepted the financial tradeoffs of living here -- specifically, expecting to be renters indefinitely? I know that owning a house is a standard step for families to build wealth, and I understand that renting isn't ideal because we'd be subject to increasing costs forever. But if this was a sacrifice we were willing to make, I'm wondering if DR would adjust his baby steps in any way for families in a situation like ours. I'm assuming we should save and invest more aggressively? Any specific guidelines?

(In case it's relevant: we are on Baby Step 3 as of a couple weeks ago!! It's so wonderful to be debt-free, and I'm grateful to this sub for the camaraderie, insights, and encouragement.)

I’m 30 and currently have about $140k in federal student loans. Interest rates vary between roughly 4.6% and 6.3%.

I’m a home health physical therapist making $120k/year, and I’m currently on PAYE. Unfortunately, none of the home health agencies/employers I’ve worked for are PSLF qualifying employers, so PSLF isn’t really an option for me unless I were to change jobs specifically to pursue it, which I’m not planning to do.

I’m paying $1,200/month in rent right now, but my lease is up in March and I’m planning on moving back home with my parents.

Once I move home, my expenses are going to be pretty low. My thought is to basically dedicate the next year or two to getting rid of as much of this debt as possible. I’m thinking around $3k to $4k a month toward the loans, potentially more some months depending on how much I have left over.

Since I’m not planning on going the PSLF route, I’m wondering if aggressively paying these down is the smartest move. My plan was to target the highest interest loans first, especially everything above 5%, and then work my way down.

Would you stay on PAYE and just make large extra payments? Is there any reason I should consider switching repayment plans?

Also, would you throw basically everything you can at the loans while living at home, or would you balance it more between investing/saving and paying them off?

Curious what you guys would do in my situation.

People always ask where to start with a budget and honestly the answer is dumber than anyone expects. Just tell every dollar where to go before the month starts. Income on top, every bill and every spending category underneath, until there is zero left unassigned. Not zero left in the account, zero left without a job.

The first time you do it, money starts showing up that you couldn't account for before. Random subscriptions, food delivery, stuff that was just gone by the 20th. Once every dollar has a job written next to it, the leaks slow down, because skipping the plan now means actively pulling money away from something you already chose.

It's not a spreadsheet thing. Paper works, a notes app works. The tool matters way less than the one habit, which is doing it before the money shows up. After payday your brain has already spent it twice, so the plan has to exist first.

tbf it falls apart the second you skip a month. One month of telling your money where to go beats a year of hoping it behaves.

I'll try to make this concise:

Husband and I are in our 40s with five kids and live on one income of 100k.

Have had his student loans paid off for about 7 years, and other than that have never had consumer debt, car loans, credit cards etc.

We do own 80 acres of farmland and have always treated the whole farm operation as separate from our household budget.

I am debt adverse but the farm was purchased before our marriage. We paid off the farm last year but still owe 110k on an irrigation system. The farm was no longer cash flowing so we are renting out our land going forward.

If we put all of the rental income towards the irrigator loan we will have it paid off in 6ish years.

However, we have five growing kids and our savings is about 10k (husband has 400k in 401k through his job). Should we fully fund our emergency fund before aggressively attacking this irrigator loan? I'm worried about kids expenses as they get older and would feel a lot better with a bigger cushion in the bank.

Edit to add: interest rate on the loan is 5.5%

I’m debt free!
Hi all, posting today from the UK 🇬🇧 baby step 7 milestone reached age 35, thought I’d mark the occasion with a Reddit post whilst my beer is cooling in the fridge!

Good evening all,

My wife and I are in a very fortunate position to pay our house off this December! We're very lucky to live in a small town where the housing market wasn't rediculous when we bought in 2023 and have pushed ourselves to continue living like college kids to and make extra payments to knock the mortgage out! We're both 26 and I know Dave uses the saying at BS7 to live and give but what does it truely mean for those who are at BS7? Also does anyone have any advice for us to continue down a good path?

TLDR: What comes next after BS6 and what should we do to continue heading down a successful path?

Hey There-

My wife and I currently have some medical debt and expensive car repairs that were put on one of our credit cards. We’ve managed to get that balance down to around a total of $10k. We didn’t want to completely exhaust the rest of our emergency savings which sits right now after using some at $7,000.

Monthly total expenses are right around $7500-$8000 and HHI net is $11,200. We have been maxing out our IRA’s with lump sum contributions every April through bonuses, etc and do not have 401K’s through our jobs. We don’t want to let ourselves get caught up in a vicious cycle and just wondering how others would approach getting this payed off quickly without paying the monthly interest on the card by not paying it off completely every month.

We typically pay any cc balances in full every month and have been for years.

This was just a rough last year with all of the expenses. Appreciate any guidance the community can give.

Hi everyone, I’m at the beginning of my baby step journey and just starting out on baby step 2. I already have a high pressure and stressful job (project management consultant) but in order to really tackle this debt, I’m considering getting a second job working 3 evenings a week. I think if I went hard on the debt, I could get it all paid off with baby step 3 also tackled within 8-12 months.

My question is how do I balance the feeling of purpose to get the debt paid off to sacrificing the little time I currently have with my 3 and 5 year old kids.

Hardly seeing them is going to break my heart. The 8-12 months is going to be incredibly tough!

Thanks in advance

Changed careers out of car sales and into my own consulting business. Working with other businesses. The pay is random, but at the end of the year, looks great. My question, I have 85k in 401k account with old employer all vested. I can roll over to my northwestern Mutal account and see what my financial advisor recommends. That was the plan !
But I have debt and serious issue. House is behind, struggling paycheck to paycheck. I wanted to cash out and get my self out for his situation. Cash out value was over 60k.
I could use about 5-7k to trade out of my current car. 1300 a month! (I know). The house is currently in foreclosure status, I don’t have much time. But the problem is the house is worth 420k, the nearby comp is on market for 389k. I owe 400k. BUT I messed up after a year or so , I had got sick and out of work for awhile , and did a loan modification for aprox 50k . So I have that hanging over my head as well. Currently not eligible to do another one, but even so, I’d really cement myself to that house. I’m considering doing the option that inflates my payment for awhile that includes the amount behind. I’d be able to afford my normal payment (4000), but if I do that option, it’s pushing (6000) . Yes I can use my money to either get head 3-4 months now that I have money coming from work, or just pull a little bit of my money from the pot to contribute.
It’s definitely not a great situation. It’s taken its own toll on me. On my fiancé . It’s a literal nightmare.
Basically WWDD with 401k money? Let the house go, and start over. Or use some of it to get out of the situation, and then start the baby steps. ?
Thanks!

Good morning all,

I am seeking advice! I'll make a long story short. I took out a loan when I initially quit my job for about 35k which was extremely dumb. I thought I wasnt going to have enough money to last until my next job and I ended up blowing it. The plan now is to pay it off in 7-9 months which takes way to long. Im military and was going to get out for good however, its offering a bonus for 25k +10k if you go to a certain unit. Im saying all this because I am an aspiring real estate investor I bought my first duplex at 24 and they have this single family home that has alot of room that I really want. I quit my job because I got accepted into another position within the company but they didnt let me go because I havent been my current position long enough. The main downside of the military is 3 year commitment. If you've been keeping up with the news you'll understand. Im currently 25 and work for a Congressman. The amount that touches my bank account per year is just a tiny bit above 100k. I also dont have any 401k plans besides the TSP. My position only lasts 2 years but im not worried about a job the connections have been fantastic being only 2-3 weeks in.

Im impatient and dont want to wait 7-9 months. I want to buy my property, collect the compounding interest of life.

Please tell me your thoughts and opinions and what you would do.

Thank you all so much!

Just ran across this on another sub and it reminds of the type of stuff that Dave is always warning people about.
Mother-in-law buys a house for daugher and son, but keeps it in her name. Daughter and son make payments to MIL. MIL pass away, other famiy members want to take the house
RealEstateAdvice - Mother-In-Law purchased house.