If you truly follow the Dave Ramsey plan – live like no one else, sacrifice and pay off your debt (including the mortgage) like crazy – there’s one little side to being debt-free that isn’t often mentioned.
You’ve sacrificed and put every penny to paying things off. You’ve delayed pleasure and “would like to’s” that didn’t quite make the must-do’s.
And suddenly you’ll find yourself with available funds to start addressing those things, but not enough to take care of some of the bigger things.
Example #1: Our well-driven Buick, purchased when we returned to the US from England, finally gave out. In April – a full month before I changed jobs and several months before we had the house paid off. Even now that the house is paid off, we don’t have cash set aside to replace the car. We have two choices: Take out a car note (why pay off your debt if you’re going to do that?) or carpool. Needless to say, we’re having lots of quality time carpooling these days. Arranging who is the lead driver on any given day is a pain, but it’s what must be done.
Example #2: The long drought cycle in Texas, combined with the shifting clay soils of our area, finally did a number on our foundation and we had to have it repaired. We had cash for that, but we don’t have money to fix the landscape (yet), the wall cracks (yet), the broken tile (yet) and so on. It’s like living in one long home remodel project – patience is the name of the game.
What’s important to keep in mind is that while YES, you have equity that you can borrow against to get everything you want/need to have done right away, NO, you shouldn’t do it, The process of becoming financially free wasn’t to go right back down that path. No matter how much you hate looking at broken tile in your foyer or the Yard of Desolation.
So tomorrow…what the foundation repair process looks like.