Tonight in class (FPU Class) we talked about baby step 4 saving for retirement and tuition. As class began I was thinking, great these are two things we need to know about. Let me back up a second and remind you (and me) what the first three baby steps are: 1) $1000 emergency fund, 2) debt snowball (paying down debt with gazelle intensity) 3) fully funded emergency fund (3-6 months expenses). So first you complete steps 1-3 before beginning step 4. Makes sense.
Dave Ramsey suggests that you invest up to 15% of your salary into retirement, putting up to the max allowed into a Roth IRA. Ok, seems reasonable. This is where I started doing math in my head and my pulse started quickening. Dave talked about the ins and outs and dos and donts with IRA's. I really understood it all. I've been putting money in my IRA since I was 22.
After retirement we began to talk about tuition for the kiddos. Apparently you can put up to $2000 per kid in an ESA. So, two kiddos, $4000. (I think this is where I started breathing heavy). In my workbook you can see the scribblings of my quick math.
IF...big if....we were to invest in our retirement and save for the kids college at the rates suggested, we'd need to be saving/ investing way more then we are currently paying on debt. Feeling the big cloud coming over my head now. Feeling the rock crushing my chest. Can't breath. Want to cry.
The point that Dave drives home each class is that you live like no one else so that later you can LIVE like no one else. So if I do what I am supposed to do, pay down my debt, keep living in the hood where I'm afraid for my family, invest in my retirement fund, save for the kids college, where will we be? In the same f-ing place we are now.
Why should we bust our ass to get this debt paid off so that our quality of life stays the same? Once the debt is paid and we work on the next baby steps, we still won't have extra money to do any kind of living. So Dave, tell me how I'm going to LIVE like no one else. If we turn around and put the money we're paying to debt to retirement and to tuition, there still won't be the things I want for my family. No vacations. No different house in a better school district. No Hubby quitting his second job and spending more time with us.
It's days like this that I want to give up. We are only having two children so we can give them a good life. But we can't even give them a good life. So why do this? Why? We could just keep going on our merry way and pay for things with credit card, go on vacations on credit. ENJOY LIFE.
Writing this now there are tears in my eyes and I feel like I can't breath. We were supposed to be living like no one else so we can LIVE like no one else. I want to be able to provide the world for my children. That's why we are doing this. I want to be able to show them the world, well at least parts of th US. I want to travel outside of the US with my husband some day. But instead we will pay off our debt and begin working on steps 3 & 4 and we will continue living month to month (but saving for the future). What's the point?
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