Dave Ramsey

My wife and I took this class in April of 17, we enjoyed it. We definitely have payed down debt because of it. I believe in his first three steps, but after that, you might want to look at the website/podcast: https://www.choosefi.com/choosefi-radio-finance-podcast/. They actually tell you which podcasts to listen to first so you don’t get overwhelmed. And after listening to some of the podcasts, you will find out there are allot of great people that they interview and have there own sites to learn from also. You will also come across some excellent reading suggestions, such as: The Millionaire Next Door and The Simple Path to Wealth to name a couple.

mahtofire14 wrote:

My wife and I did it about 3 years ago and we are debt free on everything but our mortgage and my vehicle that we purchased last year. For a couple of 32 year olds to be basically out of debt I am extremely greatful that we took his class. It’s amazing this stuff isn’t taught in high school. As others have said its basic stuff but kids aren’t getting any of that in school these days. I would recommend the class for anyone.

Agreed. It’s almost like there are entire industries looking to prosper off of ill-informed young adults who don’t know any better!

Gitchi Gummi wrote:

<div class=”d4p-bbt-quote-title”>outdoorsmn wrote:</div>
I usually shake my head when people are posting about Dave Ramsey and throwing everything they can afford towards their house payment. Interest rates are historically low, most people are locked in at less-than 4% plus its a tax write-off. If you put that money in the S&P 500 over the last seven years instead of paying off your tax deductible, low interest rate mortgage; you would have been much better off! As with most things there is a balance when it comes to paying down debt.

Some things to keep in mind when paying down debt: interest rates, tax deductible debt vs. non-tax deductible debt, current state of the stock market.

The problem with this analogy is you are assuming one can predict what the stock market is going to do.

Back when everyone and their grandma was trying to get their hands into mortgage brokering business a “Middle Man” broker was trying to sell me the argument of investing over speeding up the mortgage term. A little thing called the .COM bubble burst shortly after. 8-9 years later introduced the prime mortgage crisis. I suppose if you’re looking to make a quick $2-4K for the broker deal it’s a good selling point

Another thing to keep in mind: From a tax perspective you only get to write off the interest. Tax laws have changed in 2018 so I’m not sure what the new details are about deducting mortgage interest but the highest Fed tax bracket is now 37% (over $500K single earner). Even if you pay 10% at a state level you’re approaching a break even point but are not quite there. Unless you’re pulling in a quarter million plus a year you’re most likely looking at something closer to 35% fed/state combined income tax. At any rate you wont get the whole dollar. The choice becomes paying 35 cents on the dollar to the govt or 65 cents on the dollar to the bank. You better have a pretty lucrative investment because you may be losing 30 cents from the get go on your investment dollar. Maybe time could make up the loss. Now factor if extra mortgage payments or down payment could get you out of PMI. How does that factor in? And for how long? Home equity can also be leveraged. Debt probably not. The investment over early payoff question is not so simple and can vary significantly based on personal situation.

philtickelson wrote:

<div class=”d4p-bbt-quote-title”>mahtofire14 wrote:</div>
My wife and I did it about 3 years ago and we are debt free on everything but our mortgage and my vehicle that we purchased last year. For a couple of 32 year olds to be basically out of debt I am extremely greatful that we took his class. It’s amazing this stuff isn’t taught in high school. As others have said its basic stuff but kids aren’t getting any of that in school these days. I would recommend the class for anyone.

Agreed. It’s almost like there are entire industries looking to prosper off of ill-informed young adults who don’t know any better!

It’s pretty scary. My parents didn’t let me have a credit card until I was basically an adult and I’m glad they didn’t. I’m self admittedly bad with money and luckily my wife and this class has gotten me MUCH better. However I agree with you Phil. I think companies realize kids don’t get any type of financial training and are definitely preying on them. There should be a mandatory class in high school teaching kids the basics of money management. Personally I’d love to see it go even deeper like talking about mortgages and investing, because I was clueless about a lot of things when we bought our first house and still barely understand anything with investing.

It’s both the kids and the parents. I do think it’s terrible though. 18 years old, surrounded by a bunch of other kids, and a full semester’s loan distribution in your bank account.

holstc wrote:

When you are young and in the accumulation phase of your life, a term product is nice because it is cheap and you can protect your family in the event that you die. Typically your nest egg is not large enough yet to protect your family in the event you die from additional financial hardship without some type of cash infussion of an inurance product(cash payout).

If you have good investment habits and live Ramsey style in my opinion you will have no need for life insurance when you get into your distributon years. Your nest egg will be big enough that if you pass away, who cares, your spouse or kids have enough money in your retirement accounts to live happily ever after.

Once your nest egg is big enough to take care of those you need to I think money allocated to “protection style products” would be better spent on a long term health care product vs. a life insurance policy.

All of this talk is really splitting hairs. The first step is stop the bleeding, then get out of debt, then accumulate wealth. If you are in a position to worry about this you are doing well.

And do not forget to enjoy the ride, it goes way faster than you think!

this. whole life is good when you have no other tax shelters left. the whole life quote i got was 10x term life. life insurance to me at this stage of my life is just what it is….insurance. its not a tax sheltered investment vehicle yet. when it is, whole life will get an eyeball.

re: Dave Ramsey. We enjoyed the class so much that I now teach it at our church. We basically lived those principals to an extent without it due to both my wife and I having fiscally responsible parents and passing it down. we’ve only paid cash for vehicles, we do have a mortgage, but i paid off student loans (only 15k, i worked full time almost during school and my wife worked hard for scholarships) at 5-6 years after we were married.

The thing with Dave Ramsey is I know lots of people disagree with this or that from a strategy. The ones he gets the most push back on are :

No Credit Cards
No Debt Consolidation
No real concern for putting money away for kids college
Whole life/Term Life
Paying down the house

There are more but those are the ones that come up the most often.

The reality is he’s generally working with people with so little understanding (just look around you, in the mirror, coworkers, family members) of financial concepts that he’s not trying to get fancy. he’s trying to build discipline.

We have CC’s that we pay off. Credit Cards offer a level of protection to the buyer that Debit cards or cash can’t provide. BUT i know people that just can’t handle having that CC.

Debt consolidation also revolves around the idea that if you consolidate debt you just have more room to now add more debt if you are not fiscally responsible.

Mortgage payoff i too am not a huge fan. i’d rather keep that money liquid and not in equity. sure you have your emergency funds but i’d rather have my money.

overall, his target audience need guard rails so i’m not ardently against many of those things. I just know that for some people they are prudent.

The whole Ramsey thing boils down to eliminating un-needed debt. His program teaches paying down your un-needed debt. Getting rid of credit card debt, school loans, luxury vehicle leases (he hates fleeces) ect. Once you get rid of those loans and debts you become more determined about not buying things you don’t need. At that point I think the fog lifts a bit as far as understanding where our money is best spent or invested.

Think about this…….do you need that $4 coffee or will the .69 coffee from SA do the same thing? Save $3 a day on coffee x 5 days a week = $15 x 52 weeks = $780.00 a year. Thats just coffee. What else can we eliminate or save money on?

Trust me, nobody on earth wastes more money then I do. For some of us I don’t think we realize just how and how much we waste. Thats what his budget teaches. Where each dollar goes.

No need to swallow his program hook,line, sinker. But there is something in there everybody can use if they have a open mind.

BigWerm wrote:

My Universal life was getting about a 3-4% return last I checked, which is pretty good in the current savings rate climate imo. Both Universal and Whole Life policies can (and should imo) have level premiums, so you pay the same now as you will at 85 years old. They are not investments though, so they will always pale in comparison to open market investments, especially since no open market investment illustration usually factors in a recession or estate tax (that’s one reason why it’s apples to penguins imo). My buying dollars with pennies comment was in regards to the death benefit compared to the premium to fund the policy.

For the most part yes, Universal Life premiums do remain level, however that is not ALWAYS the case (link below). Even if your premiums do remain level, your ‘cost of insurance’ (COI) continues to increase. Eventually eating away and depleting your cash value unless you voluntarily increase your premiums.

https://www.marketwatch.com/story/millions-could-get-slapped-with-steep-premium-hikes-for-universal-life-insurance-2017-05-01

tegg wrote:

Back when everyone and their grandma was trying to get their hands into mortgage brokering business a “Middle Man” broker was trying to sell me the argument of investing over speeding up the mortgage term. A little thing called the .COM bubble burst shortly after. 8-9 years later introduced the prime mortgage crisis. I suppose if you’re looking to make a quick $2-4K for the broker deal it’s a good selling point

Another thing to keep in mind: From a tax perspective you only get to write off the interest. Tax laws have changed in 2018 so I’m not sure what the new details are about deducting mortgage interest but the highest Fed tax bracket is now 37% (over $500K single earner). Even if you pay 10% at a state level you’re approaching a break even point but are not quite there. Unless you’re pulling in a quarter million plus a year you’re most likely looking at something closer to 35% fed/state combined income tax. At any rate you wont get the whole dollar. The choice becomes paying 35 cents on the dollar to the govt or 65 cents on the dollar to the bank. You better have a pretty lucrative investment because you may be losing 30 cents from the get go on your investment dollar. Maybe time could make up the loss. Now factor if extra mortgage payments or down payment could get you out of PMI. How does that factor in? And for how long? Home equity can also be leveraged. Debt probably not. The investment over early payoff question is not so simple and can vary significantly based on personal situation.

PMI definitely does play a factor and will increase the non-equity portion of your monthly payment significantly. This should be taken into consideration.

However, even with the recessions you speak of, the market has averaged 10-11% return since the 70s. Compared to your 4% mortgage interest rate which once was (may still be) tax deductible.

Considering a mortgage is 30 years for most first time home-buyers; in the long run you would gain an average of 6-7% investing vs. paying down your mortgage. When you’re talking compounding interest, this is a significant amount of money.

This is one thing I disagree strongly with Ramsey about. The math doesn’t support paying down your mortgage over investing in our current low interest rate environment. Again, there should probably be a balance.

hnd wrote:

The thing with Dave Ramsey is I know lots of people disagree with this or that from a strategy. The ones he gets the most push back on are :

No Credit Cards
No Debt Consolidation
No real concern for putting money away for kids college
Whole life/Term Life
Paying down the house

I also disagree with his stance on “There’s no good reason at all to have a credit card.”

We currently get 2.5% cash back on our CC and better protection vs debit card/cash. The wife and I pay off our cards in full each month. It’s literally free money!

outdoorsmn wrote:

<div class=”d4p-bbt-quote-title”>hnd wrote:</div>
The thing with Dave Ramsey is I know lots of people disagree with this or that from a strategy. The ones he gets the most push back on are :

No Credit Cards
No Debt Consolidation
No real concern for putting money away for kids college
Whole life/Term Life
Paying down the house

I also disagree with his stance on “There’s no good reason at all to have a credit card.”

We currently get 2.5% cash back on my CC and better protection vs debit card/cash. The wife and I pay off our cards in full each month. It’s literally free money!

Most people are in financial trouble because they can’t control their spending or don’t make enough money to live the lifestyle they are trying to live. Hence credit cards are a bad idea. Ramsey’s program isn’t designed for everyone and his model isn’t a one size fits all.

Dutchboy wrote:

Trust me, nobody on earth wastes more money then I do. For some of us I don’t think we realize just how and how much we waste. Thats what his budget teaches. Where each dollar goes.

Oooh, now here’s a competition I might actually be able to win on this site! I’m actually not too bad if you ignore what I spend at Costco, and lunch during the week, and fishing/golf, and fleet farm.

Apart from those I’m pretty responsible.

If you are not maxing out your 401k, simple IRA, and a few other retirement benefits as a W2 there is no way I would consider paying off my house early.

For this main reason:
What happens if a financial sunami hits your house hold?

Two People:
Person A and Person B each own a $500k house putting $100k down. Note is $400k.

Person A maxes out there 401k and other retirement vehicles and does not pay down extra on the house.

Person B only does the minimum in their 401k to get the company match and pays down the rest on the house.

20 years later each person looses their job, has no income, the economy is in the dumps and neither person can pay their bills.

Person A has X dollars in their 401k account and owes Y dollars on their mortgage.

Person B has <X dollars in their account and owes <Y dollars on their mortgage.

They are both foreclosed on and go live with family.

In foreclosure the bank can take both homes and all their equity and go after all assetts that are not protected by the employee Retirement Income Security Act of 1974. This varies a little by state also.

Person A has X dollars in their 401k and no home. Person B has <X dollars in their 401k and no home.

Depending on what state you live in similar may apply if being sued for something and they go after your home equity.

Just some things to think about before going to pay off a mortgage.

In this low interest rate enviroment of <5% on most notes there is no way I would trade away my flexibility monthly to pay off my mortgage note early.

I am not saying go burn that money at the bar, but instead invest it in some other vehiclse align with your asset management goals.

philtickelson wrote:

<div class=”d4p-bbt-quote-title”>Dutchboy wrote:</div>
Trust me, nobody on earth wastes more money then I do. For some of us I don’t think we realize just how and how much we waste. Thats what his budget teaches. Where each dollar goes.

Oooh, now here’s a competition I might actually be able to win on this site! I’m actually not too bad if you ignore what I spend at Costco, and lunch during the week, and fishing/golf, and fleet farm.

Apart from those I’m pretty responsible.

I could be a contender in that competition of you were too look at “percentage funds available to waste” instead of a $ amount.

My wife and I each keep an equal amount of our paychecks for personal spending money. The rest goes towards our budgeted, shared living expenses and savings. We typically redo our budget and come up with new goals after tax season.

Trust me… I waste every penny of my spending money
Trust me…this system allows me to have no guilt wasting those pennies.

These are some great responses! You all have pointed out some interesting stuff that I am interested in researching and looking more into to get more knowledgeable in money and how all this stuff works. Most of this is flying over my head at the moment but I will be looking back on once I get a better understanding.

Here are some of the best advice I have been given or figure out with money:

#1 “Don’t take financial advice from an online fishing forum” -BK

But if you want to ignore that, here are some more

#2 Set a budget and ACTIVELY track against it MONTHLY. Setting isn’t that hard, but tracking against it takes time and will reveal so much more than you think. I think our budget has been revised every month in the last 3 years as we learn where every penny actually goes. We use Mint for this. Random things at least for me were. Gifts for family for whatever occasions, car repairs, planning gas costs monthly for long trips/ a lot of boating/ hot lead core bites :), vacations, and utility bill variance.

#3 Attack Debt, Now that a budget is set, you can figure out how to attack any high interest CC, student loan, personal loan, or high auto loan. I like the pay off smallest amount Dave Ramsey style, but an argument can be made for either highest interest or lowest amount debt. You might have to pick up extra work, do odd jobs, moonlight or do anything you can to generate extra income. This is the worst part of the process and the reason most people can’t get to financial independence because they get stuck here.

#4 Start doing more saving. IMO start with building up checking, then build up small cash savings, then build up large “Oh S***” fund = to 6 months Your gross take home or 3-4 months gross take home if dual incomes. This will give you 6 months to a year of living expenses if you alone, or one of double earners lose job. The second thing this “OH S***” does is allow you to live your life and not stress so dam much and also not feel tied down to needing the job you are at to survive. You can take risks and pursue passions (even with a family) if you have a cushion to fall back on.

#5 Closely related but coming next is maxing out 401K and Roth IRAs. Say what you want about markets (yes it probably will never be as good as it has been in last 5 years) but getting money into a investment all while leveraging max tax benefits is huge.

#6 Could be #5 as well, if you have kids, start their savings accounts…with this simple account you can start teaching kids as young as 5 years old how to manage money. After they have good savings, next would be 529 savings accounts for school or educational purposes. You know you can actually get at this money too many ways without using it directly for your kids school. It can also be used to leverage money against in terms of getting loans for property investments and what not. You can take out as cash however much your kid gets in scholarships. Its not just all tied up for school.

#7 Use any extra money to invest as your financial adviser and you decide. Let your money make you money without having to trade your time for it. That’s another thing, get a financial adviser if you don’t feel you can take this on alone, but do TON of research on the best one, and not just one you are making rich. Choose things that interest you as well if they are good investments. Properties, stock in companies you believe in or whatever that might be. If it interests you, you are more likely to be excited and disciplined on putting money towards it.

#8 Pay off your house, I say this because there are so many more ways to stretch your money to work for you especially if you have a mortgage at sub 5%. However, this is the easiest to do and understand, so if 6 or 7 are too overwhelming jump to step 8.

Somewhere in there is also utilize a cash back CC, but only if you have become very financially disciplined. The key is to spend EXACTLY like you would if it was cash in your pocket and was NOT CC and it wasn’t cash back. If you spend 15-20k a year on non-mortgage expenses you are just throwing away the chance to get a free ~2.5% (~$500) of that back as cash.

Edit: Another thing, realize this isn’t easy, and isn’t very mainstream American culture to do this but it is worth it. At every step you look at the next step and this wth, I will never say 6 months of my gross income…and all of a sudden you are there thinking you can’t max out 401k and then all of a sudden you are there. The same way debt snowballs out of control, savings and money management snowballs into your favor too. YOUCANDOOOIT!!!

Man I typed way more than I was planning on. Sorry, hopefully someone found that helpful. Or at least found step #1 helpful

Evan Pheneger wrote:

next is maxing out 401K and Roth IRAs.

I’ve heard this thrown around in this thread over and over. How many of you guys are putting in 24k a year, so for you and your wife that’s 48k a year!? If so good for you! I sure am not anywhere near that number.

I can only assume the guys that are recommending this to others, are of course doing it themselves correct?

Joe Scegura wrote:

I can only assume the guys that are recommending this to others, are of course doing it themselves correct?

Hard to say, that’s why I say kids savings could also be #5. Personally, wife and I are on this step and working towards it but aren’t there yet. 48k a year (even pretax, is a lot of money) but that money means time (which is early retirement) and time is an invaluable thing IMO.

Evan Pheneger wrote:

time is an invaluable thing IMO.

I agree 100%! For me if I was to try and reach 48k I’d be sacrificing a lot of time up front with my family. Whether that’s by working more, living in the cities or commuting. I decided to take my retirement time up front and live the slow life on a lake in Alexandria.

I commend you on your goal though! That’s impressive. I try to put away 20% of my income in savings and that’s hard enough. A guy still has to be able to buy beer and steaks, otherwise lake life wouldn’t be near as good!

I am impressed by the number of money savvy IDO’ers we have though. When you see the country wide stats for savings and debt it’s pretty alarming.

Joe Scegura wrote:

I’ve heard this thrown around in this thread over and over. How many of you guys are putting in 24k a year, so for you and your wife that’s 48k a year!? If so good for you! I sure am not anywhere near that number.

I can only assume the guys that are recommending this to others, are of course doing it themselves correct?

I assume most people mean you should max out your employers matching contribution rate. Usually 3-5%.

I personally don’t ‘max’ out my 401k, I max it out to meet my employer contribution commitment (plus and extra couple percentage points). When I get a yearly raise, its easy to throw another 1-2% at your 401k as your actual paycheck won’t change much and probably still increase some.

I prefer to invest it on my own over maxing out my tax advantaged investment vehicles. Couple reasons for this:
1. I hope to retire early, so building up my standard brokerage account is critical if I wish to retire before 59.5.
2. It acts as a buffer if we run into a pinch. Those funds are available to me penalty free.

Remember, you can’t touch that 401k or IRA money until you’re 59.5 without significant penalties.

Joe Scegura wrote:

Whether that’s by working more, living in the cities or commuting. I decided to take my retirement time up front and live the slow life on a lake in Alexandria.

I definitely agree you are skinning the cat another way that is awesome as well. On top of money management, there is time management, and the two are definitely connected. From your pics I know you get to spend a lot of time with the fam/kids which is always #1 especially if it is outdoors!

outdoorsmn wrote:

I assume most people mean you should max out your employers highest contribution rate. Usually 3-5%.

IMO this is a no brainer and should be done even while paying off debt. I do think a lot of people are trying to max their 401k and Roth IRAs. But like Joe and I said, thats a huge chunk of dough and especially tough with young kids. Plus not getting at it till 59.5 as you stated is a issue if you want to retire say at 45 or 50.

outdoorsmn wrote:

<div class=”d4p-bbt-quote-title”>hnd wrote:</div>
The thing with Dave Ramsey is I know lots of people disagree with this or that from a strategy. The ones he gets the most push back on are :

No Credit Cards
No Debt Consolidation
No real concern for putting money away for kids college
Whole life/Term Life
Paying down the house

I also disagree with his stance on “There’s no good reason at all to have a credit card.”

We currently get 2.5% cash back on our CC and better protection vs debit card/cash. The wife and I pay off our cards in full each month. It’s literally free money!

cashback is great but its not even the #1 reason to use a CC. We buy everything with a CC because all the buying power is in the CC’s hands. and They are on your side. If I buy ANYTHING with my CC and something with that purchase goes array, i can call my CC and tell them, they just take the charge off. Unless you are with a major bank like Chase/BoA/etc, debit cards don’t offer that. money is gone. Some local banks are getting better with that too but still don’thave the power of a CC company.

If someone gets my pin/debit number, they can clean you out and majority of banks are just “sorry”. not with a CC. they just say we’ll take it off.

That said, as someone above posted, some people can’t handle a CC. and thats why dave ramsey throws that blanket over that area.

Me, i’m a cash burner. that money feeling to me means nothing. Any cash to me is money to burn. I have no problem handing over cash.

Remember, you can’t touch that 401k or IRA money until you’re 59.5 without significant penalties.
[/quote]

There are a couple of possible ways.
The IRS Rule of 55 allows an employee who is laid off, fired, or who quits a job between the ages of 55 and 59 1/2 to pull money out of his 401(k) or 403(b) plan without penalty.
Put simply, 72t is an Internal Revenue Service (IRS) rule that allows for penalty-free, early withdrawal from an individual retirement account, 401k, TSP, 403(b), or 457 plan, when certain criteria are met.
Also, there is also the conversion to a Roth, but you will pay income taxes, but not penalties.

I am not familiar with Dave Ramsey, but after reading this and doing a quick search, I follow a lot of it already. I am 28 years old, so can somewhat relate to you. In the last few years I’ve gotten married, had 2 kids, bought a new house, and 2 new vehicles. The only debt we have would be house and vehicles, of which neither “ruins our life.”

What helped us the most was creating a monthly budget where I tracked every PENNY spent by my wife and I for probably 3 years. I have not done it at all for about 1.5 years now, mostly because after 3 years I was able to get a very good understanding of where our money was going and where we can save. I put it all into an excel spreadsheet with categories, budgets, over/under, etc. It got pretty detailed. I would recommend doing something to track where you spend. For us, food and entertainment were things we really cut back on. Why go out to eat for $25 when we can shop at Aldi and buy a weeks worth of groceries for $40? When you start seeing that you spent X amount of money on something each month, year, etc., it really starts adding up. It has now led me to finding where I can get rid of small re-occurring payments – getting rid of cable and putting an antenna on the roof. Switching from Verizon to Total Wireless, getting slower internet speed. Switching garbage providers. Things like that.

Another thing I do is make every single purchase I have on a credit card, strictly for the cash back. However, I treat my credit card like cash. Nothing is purchased if it can’t be afforded, and the entire bill is paid off each month. It’s straight up not an option to carry over any balance.

As far as credit cards go: If you are excellent at managing them, have good/excellent credit and never carry a balance, you can make a lot of money, airfare and hotel stays from them by researching the proper order of cards to get. It’s called churning and groups will explain which cards have what benefits and bonuses. This Facebook group and class is great as well as a class offered on the ChooseFI link I previously shared. I’ve easily made over $5k in bonuses in the last six months with minimal effort.
https://www.facebook.com/groups/financebuzzelite/?tn-str=%2AF

Rick Janssen wrote:

PS – BOTH kids have now said, Dad I wished we would have listened and followed what you said. Love it.

I tell this to my kids all the time: “The older you get, the wiser your father becomes”.

They don’t believe it now, heck, I didn’t when I was there age, but you figure it out.

Joe Scegura wrote:

I’ve heard this thrown around in this thread over and over. How many of you guys are putting in 24k a year, so for you and your wife that’s 48k a year!? If so good for you! I sure am not anywhere near that number.

I can only assume the guys that are recommending this to others, are of course doing it themselves correct?

First off, the individual 401k contribution limit is $18,500 for 2018 unless you are over 50 years old, only then is it $24,000.

Secondly, there are 2 main points here:

1. Absolutely put in enough so that you get the full matching contribution offered by your employer. To NOT do so is literally giving away free money.

2. Yes, the $18,500 seems like a lot of money, especially when you are starting out. I once thought that too, back when the max contribution was about $10k. However… Set a goal to start at the minimum contribution that allows you to get your full employer’s match. Then increase it by just a few % a year.

Once people get used to living without that money, it’s amazing how fast you can move up to the maximum contribution AND how pain-free it is to do so.

As another poster has already said, your most important asset is time. You can’t make more time.

Grouse

TheFamousGrouse wrote:

First off, the individual 401k contribution limit is $18,500 for 2018 unless you are over 50 years old, only then is it $24,000

We were talking 401k max plus Roth ($5500) which comes out to 24k.

Also shopping at Aldi and meal planning/prepping vs going out to eat is a huge life savings in general. Between Me, my wife, and lil one, we eat for about $1.25 a meal.