The Final Countdown…

Anyone else have the old ’80s synthesizer dominant song runnin’ through their head?

“It’s the final countdown….” [ba da dee dum, ba da da da daaaaa…..]

“The Final Countdown” – Europe (1986)

No? Just me. …ok, well, moving on then.

A Decision to Make

It’s here folks. The final stretch. We see the light at the end of the (long, proverbial) tunnel and it is not an oncoming train. Scott and I are within reach of finally and forever becoming debt-free (except the house)!

But, we have a decision to make.

Do we follow the plan and drain our savings to claim freedom in 2019?! Or do we follow the principle, keep the savings, and claim freedom in 2020?!

Here’s what I mean.

It’s no secret that Scott and I have been proponents of Dave Ramsey’s Financial Peace University (FPU) our entire marriage. What may or may not be a secret is that, for the almost eight years of marriage now, we’ve been following FPU’s principles and philosophies more than the plan itself.

We still use a credit card (have never carried a balance on it in eight years). We bought a couple of cars (paid them off in less than nine months). We went on a few vacations (paid cash for all of them). We even bought a house.

And we’ve done all of that while on Baby Step 2.

For those who don’t know about the seven FPU steps, Baby Step 2 is focusing solely on paying off the debt you have. No adding more debt. No credit cards. No vacations. No eating out. No buying a house. Nothing. Your only focus is paying off the debt, period. And all of your financial resources, outside of basic living needs, get repurposed for that goal.

Following Principles vs. Following Plans

That’s for people who follow the actual plan, though, not just the principles and philosophies that the plan is built upon.

That has not been us.

And that’s for many reasons, not the least of which being that my husband wasn’t actually fully on board with the plan…until I quit my job, of course. And then, for some reason I will never fully understand, he finally “got it” so to speak and wanted to focus solely on becoming debt-free. I was (and am) grateful for this. We were finally both on the same page about this and could attack it together, head-on, 100%, instead of it constantly falling to the wayside when something more exciting came along.

There was just one problem.

Our income was cut in half due to my exit from the traditional full-time employment world. And that meant we didn’t have anything extra we could throw at the debt. We had enough to live on. Nothing more.

For right at about a year, we made it fine each month without any big financial concerns or issues, though we certainly had to make some additional lifestyle adjustments in order to live on one (modest) income. We were even able to pay about $6k toward the debt due to my husband’s willingness and ability to pick up a couple of side hustles mowing yards and doing some dog training over the summer.

But, we had roughly $20k in debt still when I left 8-5 work a little over a year ago. Throwing only $6k a year at it was not going to knock that out anytime soon.

So I started working (part-time) again about a month ago. The agreement Scott and I had was that my entire paycheck would go toward paying off the debt. In addition, he would continue to do side hustles when and where he could (his desire even moreso than mine) and, as a result, we’ve been able to throw another $2k or so at the principle balance!

We are now just shy of $12k of debt left. Assuming we’re able to continue to throw all of my income at that balance, we’ll be debt-free in just over nine months! Less if he can continue to pull in some extra money working side hustles.

Back to the Decision

…that’s if we continue what we’ve been doing our entire marriage and follow the principles and philosophies more than the actual plan itself.

The plan would say this: drain any and all savings down to $1,000 “Baby Emergency Fund” and throw the rest at the debt.

If we do that, we could feasibly be debt-free in November. November! As in, two months from now November! Not November 2020 November. We’re talking November 2019 November, folks!

2019 could finally really truly actually be the year the Delonys become debt-free!

Of course, that would also mean we would have only $1,000 between us and an emergency but…that’s the plan, right?!

So, we have a decision to make and I’m not sure which way we’ll go yet. Stick to the principles and philosophies or, for the first time in our marriage, follow the actual plan? There are pros and cons to both.

Draining the savings makes us a little more vulnerable to life’s emergencies than we are right now. However, we could build those savings back up in 9-12 months and, in the meantime, we know we have no other obligations on our income except exactly what we want it to go towards. On the other hand, keeping the savings ensures a bigger chance at us being able to handle most of the emergencies life might throw at us but it delays our ability to put all of our income toward the other financial goals and dreams we’ve been delaying the last eight years for another year or so.

Six of one, half a dozen…

It’s a bit of a “pay me now, pay me later” kind of scenario. It’ll take right about the same amount of time to accomplish both goals no matter which one way we go about it. Regardless, I know we’re within a year of finally being done with this mess and can then move on to building wealth so we can “live and give like no one else!”

And that, my friends, is worth celebrating!

How about you?

What would YOU do in our situation? Keep the savings and delay the debt-free date or drain the savings and finally be done with debt forever?! Comment below and let me know!