Real Life Debt Pay Down (Without the Guilt)
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- Опубліковано 26 чер 2024
- Ben and Ernie tackle the topic of paying off debt, with a different bent than the typical personal finance podcast or blog. Where many sources focus on paying debt off at all costs, using extreme measures or simply throwing every dollar at debt, Ben and Ernie prefer a paydown approach which focuses on your priorities. What is most important in your life? Find a way to continue doing those things, while cutting back on non-essential aspects of your life to free up money for debt pay down.
Often this means deliberately paying off your debt slower than you could with a more extreme approach. And that's OK! Paying off large amounts of debt in a short time makes for great stories, but most of the time it leads to burnout and accumulating more debt. Throwing every dollar at debt can also leave you financially vulnerable, as you have no cash cushion available to handle unexpected expenses.
To that end, Ben and Ernie share their own stories about paying off debt, what they were willing to give up to pay it off faster, and what they were NOT willing to give up. Their stories demonstrate that life can still go on, even when you're paying off debt!
Share your YNAB wins with Ben and Ernie! - budgetnerds@ynab.com
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Timestamps:
0:00 Intro
0:42 Typical advice about paying off debt
5:30 Focus on sustainability instead
6:52 Ernie's debt plan
9:44 Money comes and goes, time just goes
12:39 YNAB's unique approach to debt
21:34 Ben's debt plan
30:10 Regrets
33:49 It's all about priorities
36:48 YNAB Wins
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My YNAB win. Two years ago I had no budget was living paycheck to paycheck and was $75,000 in debt. I now have a budget, savings and have paid off $52,000. I’m on schedule to have everything paid off by March 2024. I’m saving for a big trip to celebrate. 🎉 and looking in investing more of my money.
Congrats!!!
Good job! 🎉
Where are you at now? Would love an update. Way to go!!xx
@@mindsetwithmarie676 over $62,00 paid off and my push back date is by one month. Still not bad.
Two years!...That is awsome! Congratulations!!!
My questions for this kind of remarkable story are, what income were you depending on to do this and how secure was your job if you even had one? Were you struggling with this alone by yourself ? Or did you also have a partner to help or hinder. The spectrum of problems on the road to redemption can be full of pot holes. How did you navigate things like child and or elder care? How did you avoid temptations? How did you determine to stay the course? What personal strength or life lesson made this possible? Good job!
Dave Ramsey refugee here and I'm so relieved I found this YNAB channel. Dave Ramsey got me on the right path, but I had a hard time reconciling a few things like putting all our cash into debt, selling our investments to wipe out our debt. Glad I didn't because we got hit with a $1500 mechanic bill and $300 vet bill last month that we were able to cash flow and we are still paying off our debt. I'm at peace with paying the debt a little slower than Deave Ramsey would like.
Out of all the videos you guys have done I don't think one has resonated with me more than this one. I've seen those headline stories and felt discouraged that we haven't made extra progress on our student loans (the only non-mortgage debt we have) in the last 1.5 years. But this episode made me think about everything we have done during that time frame. Our furnace died. In the middle of winter. In northern Minnesota. Three weeks later, our water heater died. We had the brakes replaced on both our vehicles. My husband had dental work done that included an implant. We had another baby, which included an unpaid 14 week maternity leave. We did all of this without taking on any new debt or losing our month ahead. For the baby, I specifically created categories for the hospital bills and a "maternity leave fund" to save for and replace my lost income. Sure, I could've thrown that money at student loans, but it would have cost me those precious first months with my daughter. And, technically payments on student loans are paused, but we have been taking advantage of the 0% interest rate and paying them anyway. The whole last 1.5 years of our lives has been a YNAB win! Thank you! :)
Love this, Kristin! It's about the journey! ♥ ~BenB
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Lplmnin
2nd comment-people like me, who are disabled, are always shamed for not being able to get out of debt. I love this video because it’s true that sometimes, it’s just not possible to get out of debt quickly, or at all. And I don’t want to live my whole life being anxious about my debt versus living the life God has given me!
My YNAB win - at the end of April we had a $1000 car repair and it was the first major car repair that didn't stress me out. We had to roll with the punches for it but i didn't have to think about my credit card at all. So glad i found YNAB back in February, its totally changed my spending habits and mindset.
I really appreciate the make your own priorities and don't apologize for them comment. And it's been good listening to the regrets. My dad who passed 10 years ago said travel while you're young. I took that to heart. I traveled in my 20s and '30s and I'm glad that I did because I turn 60 next week and I can't travel anymore but I've been to Europe and all over the Caribbean. I've also been to South America. The downside is that I also didn't save much for retirement, so that is a bit of regret and I've always been in credit card debt or student loan debt. I paid off my student loans quite some time ago and I'm slowly beginning to pay off my credit card debt going into my senior years. I have to figure out a way to save up enough in order to have some form of full retirement in the next 12 years.
A few years ago I tried Dave Ramsey’s method and got hit with debt fatigue; it was just too much. Finding YNAB and this video gave me peace that yes I have debt but I also need to enjoy living. Thanks so much and keep up the great videos.
This is the biggest thing that drew me to YNAB. I love a lot of Dave Ramsey's advice but "only beans and rice" is really not feasible for non-neurotypicals or people struggling with mental health. A sustainable plan is better than a radical one almost every time.
Yeah I to adapt his baby steps into a more sustainable model for my life
Yep, "only beans and rice" lands you in the hospital with scurvy, which is definitely *not* the way to get out of debt!
@@watcherwritertried and Agree
@@TaliyahP😢
Setting up sinking funds has saved me multiple times - especially with an older car.
Loved this. And yeah - if you've lived your entire (adult) life scrambling to pay "surprise" bills, it's truly a life-changing experience to have set money aside for a car repair. Also, by taking a look at what I can afford, and by setting aside some fun money while still paying of debt, I also got out of that "spend money as soon as I have it" mindset I used to have. It's something I realized yesterday - one year ago I was browsing etsy/amazon/etc daily and just waiting for the next opportunity to *spend*. And that urge is actually gone now that my money has other - arguably more useful - purposes.
You don’t have to fund all your kids college! We were lucky enough to fund about 1/2 if they go to an in state school. But I feel like that’s a bonus, not a given 😊
It’s not a bonus or a given it’s a take from other taxpayers many of which actually paid for their student debt a novel concept I grant you
@@oldmaninthemirror I meant it’s not a given that parents can afford to pay for some of their kid’s college costs. That’s all I meant; in response to what Ben and Ernie said in the episode.
Thanks, Cindy! ♥ ~BenB
I make less than 6 figures, dealing with a chronic illness diagnosed 4 years ago, 2 years ago decided to deal with my debt which at the time was only consumer debt and identified that I was 97k in debt. Learned how to budget starting that summer and now have been doing it for 2 years. Now at 64k of consumer debt but more importantly a strict budgeter with knowing the importance of having an emergency fund. What keeps me motivated is to see my month to month and year to year progress. I also vlog about it and it helps hold me accountable. I don't mind not eating out, going to the movies and traveling, that works for me. Everyone is different.
Thank you for sharing, I'm in a similar boat and this is encouraging!
@@jb3918 It's a journey and we've got this!
Praises ro you for paying it off. You could have easily skipped out on the bill like many do, props to you. That is amazing.
@@hr8779 Thank you!
It wasn’t until I found YNAB content that I even considered putting debt as a lower priority than living life. I have boomeranged in and out of debt multiple times! I’m confident this time it will work because I’m paying it sustainably and balancing with my true expenses.
Such a good video! You can’t get time back! Enjoy your life *while* paying off debt.
Thanks. That was a refreshing new way of thinking of paying down debt that I had never heard before. I very much appreciate it as I've totally been stuck in the trap of aggressively paying down debt just to put a car maintenance bill on the credit card and Christmas right after, and then feel totally swamped in credit card debt again.
People always say “just wait, other expenses replace childcare costs” but the current daycare rates are FAR more than any of that could possibly cost. Full time for two kids is well over 1/3 of our income. There isn’t a youth sport or activity out there that costs $3000 a month, every month of the year.
an enormous YNAB win: I just scheduled the last payment on my personal loan that I took out to consolidate my credit card debt, which I paid off 2 years early, all with the help of YNAB. Because of YNAB I was able to do that while also regularly travelling to see my long distance partner, celebrating birthdays and other celebrations with friends, and being able to get people Christmas gifts. Being debt free is sweet, but being debt free while also having a good, balanced life is so much sweeter
This video was SO relatable and it really resonated. It's so easy to beat ourselves up and get discouraged, I really appreciate the two of you sharing your personal stories.
I love Dave … but I love YNAB more … YNAB while I don’t use it to the fullest has taught me to review my budget every month and make adjustments ! Been using YNAB since 2010 ? When a student of ours in FPU told us about it ! I have been so impressed with how YNAB has grown and tech improvements are awesome 🎉glenda and bill
I am not doing savings for the kids' college either. I am trying to finish the house quickly so I can buy a rental. I only want one mortgage at a time. Great episode.
Back in 2018 I was a single mom living just above minimum wage. My landlord decided to sell the house. I couldn't afford it, so I went on a house haunt and got the only one I could afford. In 2020 I got a new job with a better pay, but I still was living paycheck to paycheck. September 2020 got another raise, but still struggled to make ends meet. That's when I found ynab, tested it in December and was full on budgeting from January 2021. Now I've paid about 10k in my mortgage, bought a car, renovated 2 bedrooms and a living room, and got all new appliances for the kitchen. I'm on track to have all the money my son will need for school when the time comes and already saving to buy a new house in a better neighborhood 😁
Wow, that has to feel amazing-thanks for sharing and continued happy budgeting! ~Ernie
Great video! Remember to live!! You are so right and this video really hits me, gave another perspective to deal with debt and life.
I'm a little confused. I don't get windfalls, no tax refunds, etc. I got the ONLY extra money i ever will. Should i pay off all my debt with the extra money, or should i save some And pay off most? I never heard of YNAB, so i just don't know the principles.
I think what they mean is that you don’t need those windfalls to cover your true expenses since you are already preparing for them with your regular income.
So when you get a windfall you can do whatever you want with it - put it all towards debt, do something fun with it or a mix of both, but you don’t rely on it to, for example, get the car or the roof fixed.
How do I manage money paying debt and bills its driving me crazy and everyone telling me to save i can't I have 1400 between 3 bills then the rest of the bills that aren't part of it through out of the month and still have a life with my family
Sometimes when it feels like an uphill battle, it can be motivating to do a short sprint where you get really extreme. If you're interested, you could try the More Money Challenge. www.ynab.com/moremoneychallenge/ ~Ernie
What is the "It is all in your mind" audio from?
It's sampled from this track.
www.premiumbeat.com/royalty-free-tracks/it-was-all-in-your-mind
Genuinely, for the last how-ever-many-years, I thought that was Hannah's voice. 🤣 - Ashley
I still think it's Hannah's voice, and you can't convince me otherwise. ~Ernie
@@YNABofficial The fact that I have triggered an internal conversation among some of the coolest folks online makes my day/week/month 😎😎
Hannah here. It is not-I repeat-not my voice. Thank you and goodnight 🎩
🌻 Hannah
Good morning fellas! What’s the best way to ask a question in YNAB and have it answered?
Our support team can help you out! You can email help@ynab.com or send us a message in app.
support.ynab.com/en_us/how-to-get-help-SygqcvtC5
I started with Dave Ramsey and then added YNAB. I had a hard time accepting putting money towards some true expenses that I felt I should cut. I definitely needed the Dave Ramsey start in order to learn to stop spending the way I was. So now I’m YN-Dave-AB. 🥴
I will take a pause after I pay off the car to fill out my month ahead, build up car/home maintenance, and have an extra month for emergencies. Then I will hit the debt again hard.
Sounds like a great plan! 💪 ~BenB
😊
Love the comment about windfalls actually being windfalls. Since we've started using YNAB we haven't been reliant on random influxes of cash due to refunds, bonuses, or gifts, so when those things happen it's really exciting because we get to just chuck them straight at our goals. I also like to treat ourselves any time we receive extra cash because it is a lot more sustainable if you use 75% of your bonus towards debt & savings and treat yourself to something nice with the other 25%.