Not Gonna Stop
Why doesn't Dave think Tracy will be able to get out of debt? It has something to do with borrowing money.
QUESTION: Tracy became debt free and had her baby emergency fund when their car was totaled. Her husband had elective surgery as a result and it cost $6,000. They got their tax returns and have 2 small loans, and another loan that they co-signed on with someone else. Dave doesn’t think his answer to them will matter, for one reason.
ANSWER: I don’t think you’ll be able to get out of debt, because you won’t quit borrowing money. Every time you wanted elective surgery or wanted to fix up the house or something, you go back into debt. You won’t get out of debt until you stop that. You rationalize this and continue to go on and say you are doing my plan; you’re NOT doing my plan.
I’m not sure you’re ready to do it, but I’ll tell you what to do. You’ll have to decide if this is real or not. Get on a budget and put $1,000 in the bank as a baby emergency fund. Then take your tax refund and list your debts smallest to largest. Pay them off in that order with great, focused intensity. You don’t need to see the inside of a freakin’ restaurant unless you’re working there, and I don’t want to hear that you know what the latest movie is. You’ll also pay off this loan that you co-signed with before you lose that relationship.
Once you’re out of debt, raise your emergency fund to 3-6 months of expenses. But the next time someone wants to do something, the answer is no. You can’t halfway do this stuff.