Baby Steps

Many people assume that JAGs (Judge Advocate Generals or military lawyers) get their schooling paid for and receive bonus pay like pilots and doctors. NOT TRUE!
The military does not pay off student loans for attorneys.

However, they are allowed two continuation pay bonuses. After they serve as a JAG for four years, if they extend for another two, then they can get a small bonus. After those two years, if they agree to do another four years, then they can get a little more. (Which, of course, they take taxes out of so a person has to wait until next year's tax return to get the rest of the bonus.)

That's it.

Period.

Well, today Todd got one of those bonuses. We've been working on paying off debt for awhile and today we were able to completely pay off one student loan and a little extra on other debt. Yay!!

We were going to apply for a program where the government would pay off the remainder of a person's student loans if they work in some sort of government/public service for 10 years. While that would be wonderful (it would save us quite a bit), we hate having Todd's other student loan hanging around that long, so we're just going to bite the bullet and pay it off. So we could be debt free, except the house, in two more years, EXCEPT that Todd wants to pay off the 2nd mortgage first.

Now, I'm a Dave Ramsey girl. I think the way he tells people to do things makes sense and I like it. He has seven baby steps and they are:
1- $1,000 emergency fund
2- Debt Snowball (pay off debt except for house)
3- 3-6 months emergency fund
4- Invest 15% of income towards retirement
5- College funding for children
6- Pay off home early
7- Build wealth & give

As you can see, paying off the home early is #6, so I planned on paying off the 2nd mortgage AFTER we finished paying off all other debt, funding our emergency fund, etc. So tackling it now is hard for me because it means pushing back our 'debt free' date. Now I know that it's basically all in my head and paying it off now or later doesn't make us any less or more in overall debt, but it's that's just the way my brain works. But it's ok. Besides, Dave Ramsey does say that if your 2nd mortgage is less than 1/2 of your income to add it to babystep 2, and if it's more than 1/2 to stick it in babystep 6. Ours is less, so I guess we should do it this way anyway. Although it's still hard to be ok with it. It's like saying "I'm going to lose 20 lbs this year" and then changing it to "I'm going to lose 60 lbs in 3 years." The satisfaction of reaching your goal doesn't come as early.

So, now we have another four years (UGH!) before being debt free besides the house, although hopefully we'll sell the house by then and be COMPLETELY debt free. I can't wait! But for now, at least we're a little closer.