Husband And I Disagree On Having a $1,000 Emergency Fund

[@1redrubberball]

The largest pay raise a person will ever get, is when they have learned to manage their money.

[@scoobydoo7346]

One more paycheck then I will have my 1000$ emergency fund.

[@MrThiefHater]

May I just point out that it is written $1000 not 1000$. Just a pet peeve of mine and I have to point this out.

[@nanawordie7967]

Silli Billi congrats!

[@darlenepaul2934]

Good for you!

[@binozia-old-2031]

Jose Haro no it is $1000

[@binozia-old-2031]

Jet Plane well that depends on the country that you are in in Australia the schools now teaching not using commas (1,000,000 is 1 000 000) because the comma will represent the decimal point by 2030 or something

[@LKRealityTV]

"You're selling so much stuff, the kids think they are next" 😂😂😂😂😂 I love his tips and advice!

[@carlystreny5030]

LK RealityTV it's about to be Easter here and the eater bunny will be very frugal this year! My kids keep asking where things went lol.

[@edben24]

You're selling so much stuff, the in-laws think your house get robbed. my catchphrase

[@jarred333Boss]

Ha

[@sjhdfbasndf986]

would make life easier!

[@notnaelles]

i died

[@TianaCoats]

It sounds like she needs an app for everything. Just take an afternoon out of your day and crunch the numbers. I personally tried apps and I prefer writing the budget by hand.

[@chrisgast]

I use an Excel spreadsheet. It crunches my numbers for me. But at least I have them crunched and I know what I'm looking at in terms with my budget.

[@bstrong4919]

Tiana Coats I

[@heyitsablackguy9553]

To be honest I hate apps lol.

[@samr9622]

Tiana Coats same here!

[@bjornarmar2462]

Apps are frustrating. Microsoft Excel is where it’s at 💪🏼

[@GamerNRetro]

So is there an app that tells me the numbers....? Yeah its called a calculator...

[@MilanBroz]

Or a piece of paper and a pen. Still works even at the computer age.

[@sunnysunshine6271]

Lol, my thought exactly 👍

[@ImprovementisGrowth]

Your funny!

[@pilot6764]

Pencil and paper?

[@MilanBroz]

Yes, pencil (pen) and paper. I just keep it simple.

[@matthewlieby7589]

Thanks to Dave, I just got a second job full time. I've doubled my income and I'll have my debt paid off in about 10 months from now. Then saving for a house. And honestly I'm loving it.

[@KillermanV3]

How's it going now?

[@Sir.Wiggalot]

How’s it going now?

[@Jennysmorning]

He died to much work no sleep👻

[@lovelywisdom1989]

@@Jennysmorning 😂

[@anaa03899]

@@Jennysmorning you kill me

[@theawesomer8587]

When we went through baby step 2, we had 3 unexpected emergencies that were more than $1,000. For all of them, we didn't even have to touch the emergency fund at all, we just took the money that was going towards the debt that week and just took care of the emergency. Me and my wife were working nights earning an extra $1200 a week, that was our emergency fund. The $1000 in the bank might as well have just not be there, we didn't need it.

[@n.w.414]

The Awesomer85 sounds like you did well, but the whole point of the emergency fund is that it is there WHEN you need it. Whether you have needed it or not, it was still there, still important. What happens when one of you loses their job, or your gets sick and can't work, etc, then you are glad you have that emergency fund. So far you have been lucky, although it must have slowed down your debt snowball along the way. Hmm, think about that.

[@lisahaynes5108]

Good process. Use snowball money to address emergencies when needed. Good job!

[@insideoutsideupsidedown2218]

The Awesomer85 she should know that if she listened in FPU instead of playing on an "app" while the class was going on.

[@insideoutsideupsidedown2218]

Nancy Wilcocks the $1000 emergency fund is not there if someone loses a job. It is a baby ef for if the washer breaks, or the starter goes out on the car.

[@alexisjankowski3281]

I needed to get a new HVAC system for the home. I was getting quotes at $8,000. Looking at my bills, I was able to research and get the whole system for $4,000. I was able to pay cash given my situation. I had to take a break from debt payments, but next month, I am on track again. Your situation is the best to be in!!!

[@jmonte5896]

I can't understand all these people with student loans who can't even add 2+2

[@Finx436]

j monte lol 😂😂😂

[@AirsoftJunky74]

I think it makes sense lol

[@m.williams3497]

It’s 4😂 thank God the military paid for mine or I’d be one of them 😩

[@lindaleelaw5277]

Because they just had to sign with an " X". THEY DONT WANT TO THINK.

[@lindaleelaw5277]

@@m.williams3497 Are you sure? there is the 1+1 =3 Theory

[@anpe6524]

"We are not seeing the inside of a restaurant UNLESS you work there" HAHAHAAHA LOL!!! "You're selling so much stuff, the kids think they are next"

[@EmpireTextbooks]

Anceli Peguero nah Dave isn’t funny...he always uses that dorky phrase

[@elise12345]

lol we made an average of 70k and paid off our 55k in 21 months. So worth it to go gazelle intense.

[@matthickey5760]

Elise Buchheit FB

[@nanawordie7967]

Elise Buchheit congrats!

[@garygwin1741]

My daughter had to get her call bladder removed, luckily I had the 5500$ that insurance didn't cover, and enough to keep my bills paid, because I wasn't stupid enough to only have a 1000$ emergency fund.

[@JoyofRVing]

GARY Gwin $5500 co pay? 😳What kind of insurance do you have? Usually once you’re admitted to the hospital your insurance covers 100%.

[@privateprivate8366]

Personally, although firstly, I’m no financial expert but, I think it’s still important to maintain some liquidity, while you’re paying off the debt as fast as you can, because something can come and hit you DURING the time you’re gazelle intense. For me, I learned that because I had to suddenly separate from my family of origin, due to attempts at narcissistic abuse. So, if I had a great deal of debt to pay off, it might be slowed by me maintaining some liquidity as there is no backup here.

[@JavaScriptJolt]

"You guys are being wusses." LOL!!!

[@josuethomas1]

I make about $10 an hour and Im saving to have a 10k emergency fund. Im about halfway there. :-) I dont have a car because I can't afford one, so I use public transportation in Miami (which improved alot).

[@mikejackson7881]

Get a $2,000 car...you can afford it.

[@markwhittaker6866]

That's fantastic.

[@truthlove1114]

Good for you!

[@nfldshorty21]

Live on 40k a year and pay off quick

[@millennialmusicmindset]

I know, right? If I can live on $20,000 and throw the rest at debt, they can do it!

[@AslansMane88]

"Dave, do you have an app to do basic math, do you have an app to fix my finances, do you have an app...." Lady, recover your brain!

[@michaelpatrick3113]

mwall444 shes i her head. what shes not saying is she is probably the one who made the debt

[@Zatchwen]

I work part time at a grocery store in high school, and I could pay 35,000 in less than 5 years.... gosh

[@StupidBadyXD]

seriously? 70k income paying off 30k debt and it takes 5 years? At most is a year and a half. Even if you live in the one of the most expansive city in America. There's no excuse that it takes 5 year except not trying.

[@Jemgirly]

If they are paying Bay area Price's to live then it will take 10 year's to get out of debt not 5 😂😂

[@michellerichardson3090]

Shes either not trying to pay it off or just can't count

[@sunnysunshine6271]

She needs an App to calculate her debt repayment???? Yikes 😨

[@anghac93]

Some people actually use an app that translates their babies cries to "guess" what the baby needs instead of just using common sense. So is this situation really surprising you?

[@darlenepaul2934]

So what! Shes moving forward! What is your problem?

[@jamiecampa8191]

I’m so glad I finally decided to get out of debt. I started with my dec 31, 2018 paycheck and have crushing debt since then. I have paid off two credit cards (5k)and a student loan (800.00) I’ll be consumer debit free by feb 2019!!!!

[@painrelief3441]

Jamie Campa Grats on being debt free! :D

[@thefrugalvault2697]

Just saw your comment and wondering if you're debt free now?

[@bnzimusa]

This lady is so unmotivated

[@EllieofAzeroth]

I'm not comfortable with 1k either. So we keep 10k as an emergency fund and put the rest on the debt. A 1k emergency fund is nothing when you're a homeowner in California

[@charlesanderson1422]

Ellielae AMEN. California changes the numbers.

[@dontworry1568]

leave california. life is easier when a .8 acre plot of land with a 1400 sqft house is 150k not 1.5 million. its only that expensive because people are dumb enough to keep paying those prices. things are only worth what people will pay for them. sell out and move out. put your resume online and get a job making half as much somewhere else but your cost of living will be 1/4.

[@fanmaxis3004]

My emergency fund is over $10,000 and growing

[@paulinoaz]

Why? An emergency fund should be 3-6 months of expenses only. More then that you are taking away from your retirement and investment accounts

[@herryfrd2740]

Personally I'm tired of these people calling Dave whining about these small debts wondering what to do, especially when they easily have the income to squash the debt within 1.5-2 years. I wish Dave would give more advance personal finance tips for those of us who actually have common sense.

[@HereIsWisdom1318]

Herryfrd I agree! I've been waiting for the call that Dave gets that says: we have a household income $80,000, and $31,000 in debt...and then he hangs up, and just says: "pay it off in a year, dufus!"

[@Somuchcooleronline1]

You guys aren't his target audience. Listen to someone like Graham Stephan, or Ben Felix.

[@OffGridInvestor]

I'm tired of people who can't do maths by hand and THIS WOMAN can't even do maths with A CALCULATOR....

[@mtorres3097]

People with financial problems wouldn't call dave because they are financially responsible. Notice all the callers have financial issues.

[@jasond1500]

I couldn't sleep at night with only $1000 emergency for even a year. I would half the $5000 so $2500 to debt and $2500 emergency. then tackle the debt with every last penny that comes in after food, water, and shelter

[@violettippet5246]

I was in baby step 1 for 3.5 years. It was not fun, and I kept adding about $20/m to my e-fund. It made me feel better.

[@tanL22]

Exactly. $1000 wouldn't cover my rent if I lost my job

[@darlenepaul2934]

I agree.If I pay all my money to debt and my transmission dies $1000 is nothing. I would want a minimum of $2000.

[@KennethSee]

That's not the Dave Ramsey plan.

[@missybe3238]

@@tanL22 Most people don't have $500 saved in the bank. This is more of a psychological thing I feel. To push people to realise how hard it is to save the $ and to get them started. I think he said something like most emergencies need about $1k so it could also be because of that.

[@ChrisMFlorida]

2:07 "Yeah" = I'm not listening Dave and doing what I want.

[@TheY2AProblem]

5 years to pay 31k? 6k per year? That’s cute, I paid off 10k this year and it’s not even August. I could pay more if I had to but I’m completely debt free.

[@hcmydear]

girl,use excel for the budget 😣geezz

[@rb7454]

Niko Emil Jensen 2017t excel spreadsheets are best for us. You can have a 3+ month plan which is a great Bird’s eye view one expense at a time

[@michellerichardson3090]

Lol exactly.

[@melissahowe6254]

All the philosophy behind it is sooooo smart ! I never heard of this $1000 was supposed to make you uncomfortable. But i really love this idea

[@Sponaugle25]

"You sell so much stuff the kids think they're next" I laughed till I cried XD

[@truthseeker6338]

Dave is making more millionares than the stock market!!!

[@GalbertKun]

facts

[@NONENONENONE123]

juan cavazos not fake news

[@EmpireTextbooks]

juan cavazos lol its because of his show not his business knowledge. With his business knowledge he went bankrupt. Lol .

[@Ygnez]

@@EmpireTextbooks not really, his business knowledge made his media platform worth millions

[@trumayne2010]

@@EmpireTextbooks real estate wasn't his business,it was his job, you failed lol

[@chikifree]

lol 35k in 5 years? what is this a car loan?

[@andreweasty]

i thought the same thing as i had a car loan of 36k a few years ago and paid it as the loan even then it was only 4 years long and i only made 60k

[@andreweasty]

chrisgast a younger, dumber me. I fell for the age old trap of with a new baby i have to have a big safe new car for the baby. i could of done it in 2 with really buckling down on the budget and cutting everything but 1 year wouldnt be possible here 60k is average salary and cost of living way to high to allow for that

[@chrisgast]

I understand. I was young and dumb, too.

[@SCL111]

My emergency fund has dropped from $1000 to $300 in 2 months. T_T I was traveling for work and ended up spending more while I was away. Mum was in town for a 3 months visit, during end of financial year sales. After years of sacrifice that she made for us kids, dad was abusive and he cheated on her, I really want my mum to have a good time and have money to spend (dad was very controlling over money and for awhile was throwing money at his side b*tch and mum hasn’t worked in over 30 years). Now, I’m back to saving mode. I’m saving ~40% of my monthly income.

[@mikejackson7881]

🤗 great use of emergency fund! Others might not agree but you did good...now get back to hustling....😊

[@mambofuego5101]

“Our” student debt....Eye roll.....

[@phantasma616]

i don't agree with it, but that is exactly how Dave puts it. Once you're married it's joint debt "For richer for poorer" etc. Something to think about being marrying.

[@michellerichardson3090]

I know right. I notice the people who owe the most always want to say our. Like no, that degree doesnt say both of your nanes

[@tymom9313]

Everything turns to "our" when you get married!

[@quetzal1137]

My husband is the same way so I just hide it . As soon as he knows we have money he is looking what to spend it on .

[@millennialmusicmindset]

I can't bring myself to do the $1000 emergency fund, either. I own a home and am afraid of a $5000 emergency happening soon (old appliances). I have $5000 and only owe $4000 on my car, but can't bring myself to go down to $1000 as my income has become slightly less predictable. 😬

[@millennialmusicmindset]

(Car is my only debt besides the mortgage)

[@iguesi]

Great to hear this young couple is having the money conversation. Better a few months into the marriage than 3 decades. They can tackle this reasonably in less than 18 months, just by throwing $2,000 a month at their debt.

[@king.freddy]

Is that realistic though, at like 60000 a year? After all the necessities

[@iguesi]

Their debt is $35,000. They make $72,000 a year. $6,000 a month - $2,000 to pay the debt leaves $4,000 for everything else. This should be doable for 18 months... unless their housing expense is extremely high.

[@Michael-ke8on]

You're forgetting taxes. If that $72,000 is before taxes, their take-home pay is not $6,000 per month.

[@iguesi]

You could be right. The video did not distinguish between take home pay or gross pay. If this is gross, Take home would probably be around $4750 a month. Can this newlywed couple make it on $2750 a month and still throw $2,000 a month at their debt?

[@king.freddy]

That's exactly my point. When people say their annual pay it's usually pretax. I'm all for getting out of debt but that's extrem and probably not doable

[@earthling1984]

So basically she wants her husband to pay off her student loan debt as soon as possible.

[@dsadik666]

Earthling1984 And then divorce him.

[@earvase]

When you get married it is no his or hers. It’s ALL one debt.

[@darkman35]

Welcome to marriage the biggest scam in the book.

[@52andattitude48]

earvase No.

[@lifeisgood070]

@@earvase Is it really all ONE debt even with a prenup?

[@theladyandsonplus2]

They can't pay $2500 a month earning a gross $70k a year for after taxes that is not a lot of money. They have to factor in the current monthly payments, too.

[@yeahisaidit6184]

Bankrate has a thing that lets you put your loan or credit card amount, interest rate and monthly payments or desired time until you're debt free and it will calculate everything for you.

[@flamehiro]

I wonder how much their mortgage is, I think that is way more important question than what he is asking. If your paying 3k a month, I can see why it would be hard.

[@franky01ize]

I paid off 65k in 13 months, ate tuna and rice,

[@cynthiapowelson2442]

I actually love that combination with lemon

[@AJ-ox8xy]

She almost seems like she doesn't want to pay it off right away, like she doesn't want to sacrifice for a year and would rather maintain current lifestyle and pay over 5 years. It's odd.

[@kijafa32]

Were selling soo much stuFFF!! the kids think they are next lololololo hahahahahah!!!! :) Love U Ramsey!!!!!!!!

[@doomkitty85]

🤣 "You sell so much stuff the kids think they're next!" Lol

[@bestly802]

they treat their $31k debt like buying a car. Oh I'll just take 5 years to pay it off.

[@GalbertKun]

I would be out of debt by next spring and not spring 18 with that income

[@michellerichardson3090]

And even a car lease is 3

[@jessy6603]

5000$ is important . If you have a couple of emergencies in one month then you would get into debt again . Last month we had a car repair on our 10 year old car and it costed 2000$ . What would you do in such situations if you have only 1000$ funds . You would get into debt again . Fortunately we had enough saved up for that. They should be out of debt under 2 years with a proper plan . They r making ok money with a plan to save up they should pay off.

[@mryellowdickswagger7162]

Jessy $1000 is enough

[@EmpireTextbooks]

Jessy *cost

[@tanL22]

If you've listened to Dave for a while you realize he never answers that question when it comes up. NEVER. It always goes back to, "you can't be a victim in your life forever." I had emergencies in high school more than $1k!

[@JiisTube]

If your emergency is over $1k then you pay the $1k and then budget for the remainder and come up with the money asap.

[@EricSmyth2Christ]

His swear word substitutions 😂 😂 😂

[@zweck4629]

1000$ is a start, personally id feel uncomfortable with anything less than 6 months of expenses in liquid assets.

[@meganmarie4289]

If anyone’s really wondering it’s an amortization schedule/table. Calculated so easily there’s calculators online now so you don’t have to hand to it.

[@joslinnick]

This woman doesn't sound very smart.

[@Kevin_Roche]

You should never hope on a divorce.

[@milo74156]

Nick Joslin you're so smart that you have to down another person but you're listening to the same KZbin video the world is horrible because of people like you

[@Zavakar]

@@243wayne1 only hope that of he signed a prenup

[@187thenightmare5]

This woman doesn’t sound very financially literate***

[@ladyv5655]

Guys, this is what you get when only care about what your lady looks like. No pity for him. He chose her.

[@bryanjansen1456]

cost of living in Greensboro is very low

[@jeffreymcduffie123]

Bryan Jansen po

[@williambrown7203]

If her husband is nervous about paying that money, how about next month on a budget pay $2000 of the saved money and $2000 of next months money, ($4,000) still retaining $2000. There's always more money coming in. If he starts to realize that you are making good progress, then start retaining only $1000 in your emergency fund, and get intense.

[@sarahmitchell7799]

Agreed. It's okay to ease into it if necessary, especially if you're new to budgeting. My SO and I took four months to refine our budget as we found better and cheaper ways of doing things. We'd be further ahead if we'd figured it out sooner, but sometimes it takes trial and error (like figuring out you don't need Netflix or a huge grocery budget). As long as you're committed to the budget and talk about it often, it's fine to take a couple of months to figure it out before finding what works for you and flipping the "gazelle intense" switch.

[@tamaralaird3389]

Question: When people say they make X a year is that before or after taxes?

[@DrogoBaggins987]

Usually it's before taxes. Some people with inflated egos say that they make more than they actually do. Something like twenty five percent of people think that they are in the top five percent of wage earners. People with victim complexes under report all the time and if you listen to them the math just doesn't add up for them to do what they do on what they make.

[@inkey2]

I agree with Drogo.......almost always people state a salary as the "gross" before taxes amount

[@williamsmith3331]

Tamara Laird I strictly go on after taxed income because that's all that actually goes into my bank account.

[@larrybud]

Anton Zuykov minus other deductions...

[@classicredwine]

Don’t forget to factor in insurance, 401k, and whatever other deductions you have coming out of your paycheck before it hits your bank accout

[@strokerace4765]

Why don’t he come on the radio in Atlanta anymore?

[@Mr.Mister1974]

3 years or 2 any longer is ridiculous.

[@temujinbear911]

Im 27 and only like %2 of this applies to me, but I love watching all of this mans advice. xD

[@mattmccloud9472]

What if your car breaks down during baby step 2 and it cost 2500 to fix the car and you need a car immediately to get to work

[@killamatrix1]

You have to get a new one or used one and calculate it into your debt snowball

[@4everu984]

Call the waaaaaambulance

[@WCGwkf]

Learn how to fix cars yourself

[@sicarianduraznac]

If that happens, you go back to the 4 walls. Food, transportation, housing, necessities. You would use the $1,000 and stop paying on debts for the month or two (actual length of time varies on income and situation I am well aware). When the emergency is dealt with restore Baby step 1 and then continue baby step 2.

[@JiisTube]

If your repair costs $2500 then they ain't gonna fix it overnight. You need another way to work anyway.

[@danclapper626]

I pay my school as I go. No loans.

[@chrisbaker2669]

What if you made baby step 1 one month of expenses instead of a $1,000 why a $1,000 emergency fund?

[@richardclark4383]

I'd guess because it is a simple, easy to remember number that is within most people's reach. Half the people he deals with don't budget, so they probably don't know what a month's expense even is for them.

[@painrelief3441]

$1000 in cash set aside for emergencies basically covers a good range of emergencies. Be it needing repairs on your car, or some form of medical emergency, you will need it. If you want to add more, or do less, that's on you. Either way, you will need money to stay with you and be ready for whatever life throws at you as you tackle your debt.

[@Phil-dx8rw]

I am relatively new to the show, I have been listening on and off for a about 2-3 months and my wife I are just not comfortable with letting myself get down to 1000 or even anywhere near that to be honest. I want to know what some married people with kids really feel about having a fully funded emergency before going all out in the debt. I am just not sure about the 1000 because it is far to easy to have 1 emergency blow through that.

[@painrelief3441]

If you believe you need more than $1000 in savings, then do so. There is nothing wrong with putting more in it so long as you use it for emergencies only. Just remember that when you do end up using it on your emergency, you replenish it before tackling the debt again. It's important to have it up.

[@crispappletart]

I'm not sure why Dave said it was "good" that the hubby isn't on board with cutting the savings account down to $1,000 and using the other $4,000 towards debt. The caller hadn't mentioned anything at all about how long Baby Step 2 was going to take them at that point in the conversation. Strange.

[@freedominabudget]

Dave's response is typically good when people say they are not comfortable with a $1k emergency fund because it makes them GAZELLE INTENSE about paying off their debt so they can move onto BS3 and have the 3-6 months of emergency fund.

[@williamsmith3331]

crispappletart Dave said it was good that he was uncomfortable having only 1k in savings. because this will light a fire to get done with babystep 2 and begin to rebuild the emergency fund in babystep 3.

[@gregc247]

Im with the husband, 1k is not enough, 5k keeps you from having to re-add to it if stuff comes up

[@foxtrotthree569]

The 57 people that gave a thumbs down on this video are probably the same people that Dave talks about that stay in debt and borrow money constantly.

[@TheLeloM]

3:38 thought I was hallucinating 😅😅

[@debbieo9773]

Selling things so much that your kids think they are next!!! 😀that cracked me up.

[@desmondcastro3679]

$72,000 income & kills $31,000 debt. We're talking about 18 months time table, at least !

[@darbyohara]

Dave do the math on getting takeout pizza vs getting all the ingredients to make your own. Little Caesar $5. Homemade $8-10+

[@JamesWilson-sb9iq]

Man it's tough. The food bill is high and I agreed not to go out, but my wife likes to get raw milk and go to the farm for meat and even though it taste good and may be more healthier, she's stuck with the raw milk for 5.00 a galloon and refused to get get Walmart milk. I don't know if I could ever get her to buy cheap food to pay off debt and I get it its all about your health.

[@raphaeldelaghetto85]

I'm kinda with the husband here. Going down to a $1000 emergency fund when you already have a larger one is one thing I don't agree Dave on... The way I see it, you just have a head start on baby step 3.

[@AlfieTank]

Point is to PAY OFF THE DEBT AS FAST AS POSSIBLE with the added incentive of ONLY 1000$ EMERGENCY FUNDING. It is SUPPOSED to make you uncomfortable.

[@anastasiacline6159]

@@AlfieTank yeah, but I'll pass on the possibility that I'll get in a car accident and have to pay a $10,000 deductible with $16,000 out of pocket maximum for health care. If I didn't have the 20K in savings I would be homeless after something like that. There's being uncomfortable and there's being risky and dumb. I'm going to avoid going into bankruptcy while trying to pay off my current debt.

[@geovannyl.2801]

I’m 19 and I have a $12,000 emergency fund 😂

[@geovannyl.2801]

$13500 now

[@tanL22]

And...?

[@geovannyl.2801]

Feels great

[@advenco344]

Nobody cares

[@geovannyl.2801]

Advenco so? 😂 I’m not expecting anything from anyone. I’m saving my own money so I can wisely invested in my own future.

[@Angelo-uo2gj]

So how much should be in the emergency fund if it will take 5+ years to pay off?

[@painrelief3441]

Angelopt9 Still $1000 at the very least. If you want more, add more to ease your mind. The idea is to have money put aside to deal with emergencies whenever they happen.

[@sandrasmith8071]

The debt won't go away by itself you have to sacrifice ,create your plan you can do this

[@piotrnarozny3388]

One of the better episodes!

[@ibmtpx24]

They need a higher, more desirable goal to look forward to before they can get all the intention they need to get rid the debt. Paying 7k/yr with 72k income... they must have left some expense out in the call (10 kids to feed?), or they are simply not doing the baby step2 correctly.

[@seeyeah5172]

Dave I love this! did she just say it will take 5 years? man, yall don't wanna be out of debt #pattycaking

[@jkpropertymanagers]

Isn't it nice to have daddy dave to help us! :-)

[@taahdaah3813]

You can tell how how she's answering that she's not really ready

[@rachellawrence702]

I actually have to agree with him. They got to reduce their expenses totally.

[@Sunmoonstars976]

Yeah, I don't think she wants to eat rice and beans, beans and rice.

[@OreoPerryCat]

Realistically it will take us 3 years to be debt free. Is it okay to have only $1000 emergency fund for 3 years? Seems risky to me considering the deductible for car insurance and rental insurance approaches that and the deductible for health insurance is $4000

[@anguspontin7244]

if you do it over 5 years you can keep your lifestyle the same though

[@colinsznaider7353]

I know Dave is trying to be nice most of the time, but how can he be mad at this woman? He recommends all the time couples can get married and have children while in debt. Well... this is the result of that advice: big tension early on in a marriage.

[@kathyjuola6317]

If a couple is in agreement on how to tackle that debt, however, it is far less likely to cause a relationship issue. Working together toward a common goal can bring people together. Yes, having debt is stressful, but the problem here is that she is the only one who took the class, and didn't really seem to learn from it. She's doing "Dave-ish", and it appears that they have no plan as a couple for how they are going to knock out the debt.

[@ewitte12]

I agree with him but I only increased it $500 to $1.5k I have a 2 year estimate. Probably a "wuss" too because I only have about $24k including the car and make about $10k/yr more than her. I'd rather do it 80%, not push/convince my wife (which causes arguments) and have some sort of life.

[@TheDjcarter1966]

The $1000 is a little dated given he has been saying it for probably 15 years now, maybe $2,000 or $2500 is more realistic

[@chrisbaker2669]

What if you double the $1,000 to $2,000 emergency fund?

[@kmac6404]

Baby step number one is 1000 dollars. That's just to get you on board and say ok I'm doing this thing. Then you do your debt snowball. Then baby step number 3 is saving 3 to 6 months of expenses.

[@painrelief3441]

Then you have $2000 in the emergency fund. If it makes you feel better, do it. Put it in, then get after the debt.

[@pvalentinep12]

just awesome!!!

[@amandawithlov3908]

Paying off $35,000 in five years is way too long.

[@LectronCircuits]

Ensure that your emergency fund can cover the costs of bankruptcy. Now, that's financial security. Cheers!

[@xwhysquared]

It sounds like she don't talk to her husband about this matter

[@scottsimpson9659]

Is it best to have an emergency fund separate from a normal bank account even if you have money in the bank

[@Snowshowslow]

But... If you have a steady job and you know you can pay it off without traumatising your kids in two years, why go batshit crazy to do it in one year? I get that approach for almost intenable, scary or bankruptcy threatening debts, but a debt that's half your annual income is not that scary and does not need to be tackled THAT intensely. I get that most of the people here will not agree with me, but maybe someone can explain why?

[@arleneaugustahair8393]

Snowshowslow you want to hurry up and pay it off so you can start saving for retirement. You can become debt free and live without being stressed.

[@painrelief3441]

The idea is to knock debt out as fast as possible. Granted, if you got things that you need to spend money on, such as kids' expenses, then yeah. You can budget that in. If you got nothing in the way, no kids to worry about and have no real reason you cannot take the debt out, then you take care of it.

[@alquinn8576]

there is probably a psychological component to that strategy as well: people with chronic debt problems are at risk at becoming resigned to being in that state forever. by applying shock-therapy to their situation, they can quickly see tangible financial results in changing their lives

[@miketheyunggod2534]

Married four months and already Dave is breaking up a marriage. Must be a record.

[@CaraMarie13]

If they are serious about getting out of debt in five years and they set a timeline of five years to pay those loans, I agree that $1k is nothing. $1k won't get you to the corner specially when you consider that most emergencies are medically related. However, if they want to get out of debt in a year, $2500 a month might be a bit of a stretch on $72k. Idk how the taxes are in their state but am assuming they take home close to $2k a check if they are paid biweekly. So hopefully there rent and other expenses is under $1500 a month.

[@mrq1701]

Much of what Dave teaches is based on accomplishing psychological rewards as quickly as possible, which helps people stick to the plan. I personally do not agree with saving $1,000 in the bank while you carry debt like credit cards. I prefer the debt avalanche over the debt snowball, but I understand why the snowball is more psychologically rewarding.

[@JiisTube]

That's how I thought at first, but now I'm sold on the snowball. I calculated the savings on Avalanche and it would only pay off in less than one month faster anyway. Plus, snowball also lowers your total monthly minimums faster, so you have less risk and more cash if you need to refill emergency fund or pay for something large. So with snowball you can get by with a smaller emergency fund.

[@coryulrich6489]

This one I can relate to.

[@jacobg8640]

If they actually get out of debt in a year, and the interest doesn't matter too much, I would just save the money as an emergency until their balance reaches 4k. Then finish off the principal. That way you get rid of the debt just as fast and are only without that money for a month or two. If they lose a source of income before they finish, they'll need something to pay off the minimum balance in the meantime.

[@billgateskilledmyuncle23]

He must know his insults will ring in his listener's heads and motivate them to prove him wrong.

[@johnwaters7847]

The fact that I have no debt, and 3k in savings, at 31 years old makes me feel like I'm living paycheck to paycheck.

[@ladyv5655]

Pay off the student loan as quickly as possible, then save your emergency fund. Save more than $1000.

[@Lemons19902010]

I have a question for you guys, does baby step 2 (paying off debt) include accounts in collections?

[@Lemons19902010]

sesurin Thanks! I use Wallethub and it lists all of my debts, including collection accounts.

[@williamsmith3331]

Lemons19902010 yes

[@mikejackson7881]

Yes. It is your debt you acquired....🤣

[@JiisTube]

Yes, but i think you would not sort them into the normal snowball among your accounts that are current. I think you don't want to make monthly payments on something in collections, but would instead save up the proper amount and negotiate it then pay it all at once. Contact him please, it's a good question.

[@Reptitude]

Very little math skill here. Build your own Excel sheet.

[@papishampoo2018]

I have 10 $1000 emergency funds. But i like seen my checking acct at 10k and i dont wanna pay off my 9.5k debt and have only a couple hundos left in my acct😩😔

[@dontworry1568]

but how quickly can you build up your savings account once youre out of debt? right now you are just wasting money in interest by not paying it off. I don't know what it is but, what if I told you, you can save another 50 or 60 a month. Would you do it? Yes, right? well get rid of that debt and stop paying interest just because you are scared to be broke for a month..

[@alisagraham6513]

Remember what Dave said, debt equals risk. You risk losing a lot with debt.