When my husband and I were paying off our debt, we followed Dave Ramsey’s plan. For us, it was the simplest and easiest not only to understand but to follow. His plan worked in our life on almost every level. We bought into the idea of the baby steps, the debt snowball and even getting gazelle intense. Except our gazelle intensity wasn’t so much that of a true gazelle, but more of a hungover gazelle. We still moved fast but you could tell there was something a little sluggish about us.
Part of the reason we were a little slow was that we tried to save and pay down debt at the same time. This is really hard to do, but for us it was a necessity. We are in our thirties and are substantially behind in our savings. We had some ground to cover and if it meant throwing $100 or so every month to savings instead of towards debt, then so be it. Truth be told, it was a stupid decision and I don’t recommend it. Focus on one thing at a time. Follow the order of the baby steps. They’re listed that way for a reason.
Another reason we were a little slow is due to the fact that we didn’t have many every day expenses to cut. When we decide that we’re going to get all gazelle in paying off debt, one of the first places we go is to our daily vices and habits. Those small changes add up to big debt snowflakes. However, my husband and I were already packing our lunches every day, we didn’t drink coffee, we didn’t smoke, we didn’t gamble (for the record, we still don’t) and we used the library or Netflix for almost everything else (for the record, we still do). If we bought from iTunes, it was from a gift card. We needed high-speed Internet for our part-time jobs, so cutting that wasn’t even on the table. There were some days I wished for a habit just so I would have something to cut back on and somewhere to find extra money. Those were dark days.
The third reason is that we didn’t have much to sell. Some people are excellent at selling their things. I am not one of those people. For starters, I always forget about our neighborhood garage sale and I don’t have enough initiative to hold my own. Second, I’m too lazy to get organized enough to participate (this would also imply that I am organized). Third, we just don’t have a lot to get rid of. Yes, there’s baby clothes and toys and a treadmill that I’d be happy to let go of but other than that, there’s not that much. I never thought that for the amount we have to sell, it was worth it. So we never bothered to sell anything. I’m not sure that our debt repayment suffered and it was a lot slower than it needed to be.
That’s probably the biggest sticking point for me. When you start reading Dave’s book (we never took his class), he recommends that you sell whatever you can in order to build your $1K emergency fund. While there are other ways he suggests, this is the most common because it’s the easiest. When we took a look around and realized that short of selling the dogs, we had nothing, we felt hopeless. We seriously didn’t know where to start. How do you get gazelle when you have nothing to sell? Or you have no habits to break?
The quick answer? You don’t. The long answer? You do whatever you can and cut wherever you can to make up for the fact that you have nothing to sell. You don’t bother to dwell on it and you move on. If you focus on what you can’t do, you forget about the things you can do. That’s a huge hindrance and deterrent. If you’ve already developed the motivation to knock out your debt, the last thing you need is to focus on what’s holding you back from getting started. Find one place to cut or cash in your change jar. Use that extra money and just get started. You’ll be surprised at how quickly it starts to roll once you finally push go.
As for us, we eventually both landed part-time jobs which more than made up for the lack of anything to sell. On the bright side, it made us realize that we’re not packrats or hoarders. It also made us realize that when we move, packing is going to be pretty easy. That was good to learn. But if you’re like we were, and you have nothing to sell or any habits to get rid of to kick off your gazelle intensity, don’t worry. You’ll find somewhere to come up with the extra money. In the meantime, you can hang out in the lounge with the rest of us hungover gazelles. We may be slow, but we’re fun!
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[…] How do you get gazelle when you have nothing to sell? (from Daily Money Shot) […]
Excellent article. My wife and I went through this last year. We’re not really totally done. We still have student loan debt (argh!!), one car payment and a house mortgage. We did get rid of a ton of other debt (about $40k worth), but we did so through super hard work. It isn’t easy, but neither is being poor and in debt!
Kevin Haggerty recently posted…Why I Love Bigfoot
I agree, Kevin. Being poor/broke and in debt is just as hard, if not harder, than getting rid of debt. I’m glad that you and your wife were able to get rid of most of yours. It’s a great feeling, isn’t it?
Great article. I’ve seen the same tips countless times including the ‘Sell stuff’ but as you pointed out, that’s not always possible.
Keep in mind that the goal is twofold: Pay down debt. Don’t add any more. If you do that, then you’ll pay a bigger and bigger percentage by month of your debt, as your principle reduces and your payments increase (due to paying less interest) each month.
Money Beagle recently posted…The Maddening Part About Christmas Finances
That’s a great way to look at it. Paying down old debt means very little if you’re still incurring new debt. It’s a zero sum gain. Which is not cool.
Awesome article! I’m often discouraged because, like you, I don’t have any daily habits that could save me money. I’ve found myself annoyed by people who drink starbucks every day because all I can think is “I could save so much money if I were them!”
I’ve thought the same thing! I would look at people going out to lunch or drinking DD coffee and I would think “damn, if I were doing that, I could save $300 this month. Don’t they know how much money they’re wasting?” Then I wonder how much debt they have. That’s probably not healthy.
We did sell a lot of stuff at the beginning but now we just don’t have much extra stuff lying around. I think the biggest thing is getting another job (which you’ve already done). my husband was a waiter for a few months to help us get back on our feet. It helped a lot.
Newlyweds on a Budget recently posted…The Side Hustle: December Recap
Getting a second job is essential if you have nothing to sell. Now that we’ve paid off our debt, it’s helping us to catch up on our savings and provide a bit of the “extras”. It’s nice to have that income.
I thought this was going to be about Tony Little and his exercise machine. What a disappointment!
This is one of the reasons why I think that Ramsay & Orman and anyone else who writes a “follow my plan” book are full of crap. You said it yourself–not everyone has a habit to break or extra “junk” to sell. I absolutely hate the “my way is a blanket plan and will work for everyone regardless of their individual situation.” attitude and approach. That’s why I always say that financial advice is not one-size-fits-all, and why no one way is the right way to approach anything.
It’s great that you were able to adapt to the “rules” and still make progress, which is the bottom line, not my hatred of self-indulgent turds 🙂
Eric J. Nisall – DollarVersity recently posted…Create Loyal Customers With These 5 Customer Retention Tips
Sorry to disappoint 🙂
While the plans are designed to be a one size fits all, they should be a one size fits most. I think it’s important to look at the totality of a plan and decide if it will fit your life. We actually incorporated bits and pieces of some other plans in with DR’s to make progress. However, if you don’t know what you’re doing, using an “expert” with a national platform and multi-million dollar business is a good place to start.
I still wouldn’t trust them. My suggestion would go through the local church or synagogue and see if there are any members who can help 1 on 1 at the very least. There is just something very off-putting to me about those “experts”, especially when it comes to an ethical standpoint. At least Suze Orman has a show where she looks at peoples’ individual situations independent from each other and gives (sort of) tailored advice.
Eric J. Nisall – DollarVersity recently posted…Create Loyal Customers With These 5 Customer Retention Tips
I agree that they can be off-putting (I can’t stand Gail Vax-Oxlade, or however you spell her name). The one thing that they do offer versus your suggestion is that they’re impersonal and don’t invite gossip. Where we’re from, can you imagine going to a member of your temple and asking for financial help and not having it spread like wildfire? Buying a book from Amazon or going to the library offers anonymity.
I think if you have nothing to sell then getting another job is the best idea, and I’m glad that you’re not a pack rat that had lots of stuff lying around to sell in the first place.
I’m not saying this is the case for you, but I know some people don’t go “gazelle” enough because they assume that some of their discretionary spending are really fixed expenses. To be extreme, you have to consider things like dropping internet or cable or downsizing to 1 car or changing to a prepaid cell phone. These things don’t work for everyone, but I think they’re things that need to be considered if you’re desperate to get out of debt.
Jeffrey recently posted…How to Take the Declutter Challenge! (Plus Updates)
I agree. There are some people who think that their discretionary spending are fixed expenses. And I agree that you have to be willing to make extreme sacrifices. However, sometimes those extreme sacrifices are not possible depending on your circumstances. I certainly don’t look down on people who don’t make some of those extreme choices but at the same time, if you’re drowning in debt but refusing to give up anything, you’re not going to garner any sympathy from me!
The only part I don’t agree with is needing to pay down debt before saving. I got out of debt by doing both at the same time. When the day came that I had saved more than I owed it was very satisfying to make one really big payment and be debt free. It did cost me some money since I was paying interest on money I had in the bank, but I was buying liquidity and that made it worth the price to me. Once I was out of debt, the money I had budgeted for debt payment rebuilt the savings very quickly.
It’s different for everyone. For me, I would have preferred being able to pay down debt before saving but I didn’t have a choice. It was hard in my situation but I’m glad that it worked out for you!
I finally think I have some items to sell. At least enough for a small garage sale. But I’m also a hungover gazelle; not much to sell and not much to cut back on!
Christa recently posted…Money and Relationships: Moving for More Cash
I’m glad to have company in the hungover lounge!
Our neighbors are newlyweds and they are doing Financial Peace University. My boyfriend and I have decided to take it as well. We’re doing pretty good about not spending, but we’re not fanatical with our budget, we’re not trying as hard as we could be to make way more money, so I think this will help us get more focused. We don’t have a ton of stuff to sell either, but there are other ways to be gazelle intense! Good post, thanks for the gazelle reminder!
American Debt Project recently posted…The Hazards of Craigslist and Dealing with People Who Hire You via Craigslist
Good luck with FPU. We never took the course, just read the books. I hope it goes well for you! It is important to get focused with your budget. Once we did that, it was so much easier to start paying down debt.
Flexibility is key. I have the same problem though. I know about eBay, yard sales, Craig’ s list, but I still have a pile of crap I need to get rid of.
Dr Dean recently posted…A Fortune: Is A Lost Claim Owed To You?
Good luck with your sales. I never had much to sell so I’m not familiar with the success rates of eBay, Craigslist, etc but I hope it works out well for you.
Well now I feel better too! Haven’t smoked, drank or whatever in years and have nothing really that hasn’t already started falling apart. I make money writing on a keyboard in the bedroom here – so gas is out, don’t need a car and trips to McD’s aren’t even thought of. So what the heck do you cut back?
The only problem I have with Dave Ramsey is the debt and saving plan. I’m sorry, but what happens if you have an emergency while paying down debt – you’re screwed. I think you did the right thing by saving and paying as you could. My two cents.
Bill Swan recently posted…Are You Teaching Financial Responsibility or Promiscuity
Dave actually recommends that you save $1000 in a baby EF before you start paying down debt; it’s baby step 1. He recommends it for the reasons you mentioned–you never know what can happen and DR feels that most emergencies can be covered by $1K.
One of the reasons I met you (ie joined the NSD/CSD club) was because I needed help breaking my chai and a bagel habit. It wasn’t every day, but it did help.
We do have tons of things that could be sold, but I’m married to a pack rat. For now, I work on keeping my stuff down and settle for him throwing out the junk.
shanendoah@The Dog Ate My Wallet recently posted…Self-Promotion as a Process (part 2)
I can only imagine how difficult it must be to live with a packrat. But at least you’ve accepted it and you’ve figured out a work around.
And it sounds weird, but I’m glad you had a bit of spending problem 🙂
What is this “had”? That makes it sound past tense. I still have a spending problem. Cash flows through my fingers like sands through the hourglass. I’m not actually allowed to carry any.
And remember, I’ve mentioned that it’s going to be a challenge for me to save up my allowance for FinCon12 (I will do it). That’s because I like spending money on little things.
And it doesn’t sound weird. I totally get it.
shanendoah@the dog ate my wallet recently posted…Self-Promotion as a Process (part 2)
I used to dwell on a fact that we cannot save enough while trying to pay off debt. In the end, we could not do both and I gave up on saving. Let’s just get that debt down I said and moved on. Life became a lot easier after that. It scares me that we don’t have savings. But to see our debt go down makes me feel better.
Aloysa @ My Broken Coin recently posted…Challenging the Shopaholic in Me
It’s great that you were able to focus that way. It’s also great that you were able to figure out your priorities. But the effect of seeing your debt decrease does feel good!
I do know about the $1,000 baby step, but I respectfully think this is a way small amount for many things. Hence the reason I recommend a 3:3:4 savings ratio from any income left after basics are cared for. I wrote about that in “Effective Ways to Manage Money” on my site.
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