Saturday, November 30, 2013

Dave Ramsey & my Depressing Reality

 Love listening to Dave's show. I've read his books, agree with his program, and after months of falling short I did the math.
And this my friends is my non-success story.  
There will be no debt free scream from this home. 
At least not for 30 years from our most recent home mortgage refinance.

I recently heard a debt free scream on the Dave Ramsey radio program from a family who had paid off a mortgage of $185k in 2 years, impressive! Until they announce their annual income of $200k.  YIKES!! that means their mortgage was only 91% of their income.  Ours is 295% of our income.  If I did the equation correctly we would need a pay raise of $150k a year.  I doubt that will be happening anytime soon.

If we cut out all extras (excluding piano lessons as it is consider non-negotiable in our family)

Extras include:
cell phones
sports for the kids
new clothes
cable TV (which we have never had)
date money
babysitter budget
vacations (going to visit family)
gift giving
new home furnishings (which we rarely have anyway)

Doesn't factor in car repair or major medical. 

We could pay off our home (which is our only debt) in 12 years.  Which means by the time we paid off our house 3 kids would already have moved out of the house.  Not sure if the inconvenience and stress of living such a tight budget for such a long time is worth it.

SO our plan is to continue to raise our children as is, we have always lived a frugal life, but we are comfortable at this budget.

When the kids have all left home, or are much older, I will get a job, expenses will decrease as they move out (we aren't paying for their college, they are)  and THEN  we will chisel away at our mortgage.

So Dave Ramsey, I respect you, I appreciate what you teach and encourage, BUT we have already trimmed our budget as tight as we feel comfortable while still raising our kids and teaching them the skills we want them to learn.


PS If we did get that $150K raise we could have our home paid off in about 16 months, which is pretty damn fast, faster than them!!  so listen closely for my imaginary debt free scream.

Counting down in 3...2...1...  We're DEBT FREE!!!!

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