Before coming to grips with my crushing debt, I would have multiple savings accounts going for the multiple life goals ahead of me - a new car, paying off my granny’s mortgage, and (hopefully my eventual) wedding. All of these are pretty pricey and important parts of any 20 something’s life.
Say I save the extra $100 I’m projected to have every month via my new and not improved income. If I saved that $100 between those three goals I’d be putting $33.33 towards each one. Say my DREAM car is about $20,000 and I stick with the $33 each month. It would take me 606 months or 50 years to save enough. (I’m not calculating interest yet...That would help, but not enough.)
Instead, let’s also say I get rid of all of my debt. (WOOOHOOOO it’s 2025!) Assuming I am still at my current pay, I would have about $936 to put towards my savings goals each month. If I would focus on only my new car goal, I would be able to pay for that car in 21 months or less than two years.
Yes, my math is pretty hypothetical. Yes, it doesn’t factor interest, but what it does show is the importance of focus. If I focus now on reducing my debt with any extra cash I have, then I will be able to pay for what I want later.
“If you will live like no one else, later you can live like no one else.” - Dave Ramsey
How much money could you have every month if you didn’t have to pay off debt?
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