I’m an optimist… but even optimists fight off nagging doubts once in a while.  I’m fighting mine off right this very minute. I am definitely gung ho about following Dave Ramsey, 100% to a T, even to the point of being fully mortgage debt free.

My nagging doubt? The fact that we have more student loan debt than anyone on earth (ok not literally, but it sure feels like it) and the fact that we are going to have to do baby step #2 in 2 stages… the first by paying off credit cards and auto loans, then splitting the step in half and saving a bigger emergency fund, then paying off the student loans and personal loan we have.  Yes, our student loans combined are approximately double our annual salary.  The personal loan we have is just slightly under our current annual salary.

I know we can pay it all, it will take time, I just want to make sure we are doing it right.  For now, we are putting $2,000 into our emergency fund.  $1,000 just makes me nervous, especially with questionable appliances, a questionable car and some potential medical expenses coming up (suspect braces for at least 2 kids, suspected glasses for another, etc).

Anyway, just about done with baby step #1 (saving the initial emergency fund - which I upped to $2,000 from Dave’s recommended $1,000).  Can not WAIT to get into paying off the debt again (yes, we’ve been credit/auto debt free before).

Some readers have commented that using your credit cards is an option for an emergency fund. Frankly, that’s ridiculous. If your goal is to be debt free, why would you keep using the credit cards? Sure, the idea of paying them off in full every month is great, but obviously if you are trying to get out of debt, you haven’t been paying them off every month! Get real people! Get that emergency fund established so you never have to use your credit cards again.

Remember, it’s a mind set. You must make up your mind that debt is not an option. This means that using your credit cards is not an option. When you are recovering from carrying balances (aka, getting yourself out of debt) you have to stay out of temptation completely. Become a “card carrying member” of the cash is king world!