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@highwire: is that arranged in the way he thinks you should achieve that goal?

We never complete step 2, it's hard!

We've had success with all those steps, except that I'm not focused on paying off our home early. So, I would personally move up "give" to a higher position, because I think that's more important to start before you have a home paid off.

I got myself into trouble in my early 20's with credit cards, and using the debt snowball method worked really well for me. It does take time, but it feels so good to get things paid off!

I also totally agree with the need for some savings (even like $500, if $1k isn't immediately doable). When you have zero savings, any little thing outside of your normal budget will send you back into debt, and let's face it; those "little things" happen all the time!!

ETA: With step 2, I have not paid off all student loans, for the same reason as @Adira. I guess I view those differently than say credit card debt, car loans (unless your loan is like 1%), payday loans, cash advances, etc.

@Adira: My DH feels the same way! I want to get as many debts crossed off but his opinion is the interest rate is lower so pay off the higher interest rates first. ie mortgage and credit card!

We don't follow the plan per se, but we're done through step 4. I paid off my student loans when my income increased and I wasn't benefitting from deducting the interest in my tax filing. The interest rate wasn't super low, but it was low enough. We have a car loan, but it's at 0 percent, so I see no reason to rush to pay that off at the moment. The only other debt we have is the mortgage but it's literally a month old.

I get stuck between the college funding and paying off your home. We purposely spent way less than what we could be approved for and we put over 20% down in cash. I have to run the numbers to see when we can reasonably pay it off, but I want to have that done before or in conjunction with putting money away for LO's college fund. He's got a nice chunk in there now, but at the rate tuitions are rising, it won't even cover his meal plan.

I think the idea behind the order he does things in is not that it makes the MOST sense to maximize your earning potential for each dollar but that it builds a better confidence and momentum for changing your lifestyle and mentality around money and debt. He doesn't care about what is high and what is low interest when it comes to the debt snowball. It's all about getting excited to pay something off then move on to the next.

I will say that DH and I used his snowball method to tackle our debt and now it's all gone (woot!) and it worked. It seems silly but you really do feel awesome and motivated every time you pay something off.

@regberadaisy: @yoursilverlining: For a lot of our "debt", we feel like if we can earn more investing it than the interest rate, then it makes more sense to invest. For example, I have student loans at like 3.5% interest. I COULD put extra money towards that every month OR I could use my extra money to invest and possibly gain 5% or more on my money! To me, that seems like a better investment. But I've never really figured out the math to know for sure. I just assume 5% gained is better than 3.5% lost.

I followed them.

$1,000 In An Emergency Fund - DONE
Pay Off All Debt With The Debt Snowball (except mortgage) - DONE
3 To 6 Months Expenses In Savings - DONE
Invest 15% Of Income Into Roth IRAs And Pre-Tax Retirement Plans - DOING
College Funding - DOING
Pay Off Your Home Early - DOING - Will be paid off in 9 years (bought 5 years ago)
Build Wealth And Give - That's the plan...someday.

I started from nothing when I first started his plan about 6 years ago. During the first season of FPU I attended, I got $1000 into the bank for savings and started paying off my debts. They were paid off 2 months after our wedding.

After we got married, we started a joint savings account that is our joint Emergency Fund. We have 3-6 months of expenses in it right now. We only touch it to pay for daycare every 6 months. Our plan is this - we pay daycare early so we can get a 15 or 20% discount (depending on the time of year). We repay the account each month with more than we pay for daycare. At the end of each 6 month period, we have automatically saved an extra $2200. It's working for us.

I found it hard to stop sending money to my IRA when I was paying off my credit card bills so I continued sending just a little each month to retirement during that time. Once I paid off my debts, I bumped my retirement savings back up to 20%.

@highwire: @regberadaisy: the snowball part of it worked SO well for me. I had a really high interest rate on a card that had a lot of money on it but, paying off that little bill felt so good. It always felt great when I had one more bill I no longer had to pay each month!!

He does not suggest transferring money to a lower interest card because of fees in doing so but, I ended up doing this. We did the math and I ended up paying less in fees than I would have in interest over the period I spent paying off the bills.

@mediagirl: talk to me about the college savings, since you're doing it now. What's the goal you have in mind?

@highwire: oh, great!! Thanks. Are there any sites that does a really good overview of his steps?
I'll check it out and send to DH and see what he thinks.

@regberadaisy: check your local library, they might have the plan.

@regberadaisy: I don't think you need to buy a plan. He has a few really great books. The one that @highwire: is talking about sounds good. I also have The Total Money Makeover and really like it. He changes the way you think about money and spending/loaning/debt/etc. Pick up one of his books (like from the library!) and you'll be on your way!

Now that I think of it the 1K does make sense. Unexpected expenses come up so often and they usually set us back. So having that fund set aside will be helpful in keeping the momentum going, so to speak.

@littlek: @looch: we don't have a lot to send to college right now. We send any bonuses we get to her college fund and send a set $ to it each month. That number is not a lot and it certainly isn't what people say you "have" to save to be able to fully pay for college in 18 years. Our goal is to have enough to help her with college, not to pay it in full.

We probably are not doing things the way DR wants us to but, we find paying off the house more important than putting away money for college right now. Once we have the house paid off, we will be able to put some more money towards her college fund.

When we get raises, we split the money between college, the house and savings.

@regberadaisy: if I can find it, I could send you the cd's. When you join the class, you get a set of cd's that are just the audio recordings of the classes. Mine are his older ones and some of his points are WAY off base when it comes to percentages for savings but, the general gist of the program is there.

@mediagirl: yes, please!