This stood out to me:
"I could make payments and have everything except the house paid off in about 4 years, I can make the payments and I don't struggle to pay them BUT... "
I get that. And Dave Ramsey has lots of great advice. But, he's also kind of geared to folks a little more off the deep end than you sound to be, meaning they don't even grasp the first rule of holes - you find yourself in one, stop digging.
From reading a lot of what you wrote, doesn't sound like you woke up one day and had a mountain of debt (mountain - whether that's $10 or $1M - using mountain as generic term to say some amount you're uncomfortable with, not meaning it in a judgemental way). It took time to create that mountain, so maybe it's not entirely unreasonable that it takes time to make it go away too. Again, I like Ramsey a lot, but that one extreme to the other is kind of a theme. Which is perfectly fine if that's your comfort level. A lot of people find out it is not and going "cold turkey" is a very painful process.
I would also suggest checking out the Motley Fool forums in the "Living Below Your Means" section. There's a lot of similar, but alternative, ways to getting out from under debt vs the Ramsey approach. I haven't been there in a while so can't say for sure if that's still a good resource, but I found it a lot more helpful with a many varying viewpoints. If nothing else, good sounding board and feedback on your plan. Of course there are various levels there ranging from "Cable TV is a luxury, there's no reason your kids should have cellphones, no reason for you to have anything beyond a basic voice & text flip phone, your clothes will get clean enough without laundry detergent, etc" to a little more easier to live with ways to create household budget surpluses that can go towards saving & debt. A popular theme there was definitely building up the emergency fund prior to doing anything beyond maintaining minimums on debt. That is critical & hopefully part of Dave Ramsey plan - but if your Mastercard or HELOC is your emergency fund your plan is doomed to fail.
I really get it though. I'm the type person if I want it, I buy it. Within reason, but I make a decent amount of $, and don't feel guilty about spending it or borrowing/charging to get something sooner or get the better version vs settling for a lower cost alternative. And I still carry some consumer debt beyond a mortgage, and it's an amount I'm comfortable with. But I was a lot worse years ago and did have an unreasonable [to me] mountain. Some would still call what I have unreasonable - everyone has a different level of comfort ranging from "I pay cash for everything and owe not one dime" to "I'm so upside down if I liquidated everything, didn't buy another thing ever, it would take me 20 yrs to break even".
Reason it stands out is sounds like the plan is to "pause" the hobby farm and "get by" with the little machine. And that's perfectly fine. But the "plan" calls for re-buying that tractor's replacement at some point. So you'd really need to evaluate long term what makes more financial sense - keeping a known good machine with equity and has a set pay off date after which point is not a liability at all - or liquidating (maybe at a loss) and then needing to replace it, possibly right around the same time it would have been completely paid off anyway.
Again, my tolerance for debt is above "none" or "none other than mortgage" - and up until very recently yours was above that level too - but sounds like you're not taking food off the table to pay minimum on Visa bill or a lost paycheck away from bankruptcy. There is a lot of middle ground between entirely debt free in X months and your uncomfortable mountain. There is nothing wrong with having a plan to be debt free or under $X debt in X # of months AND building an emergency AND still getting some enjoyment out of the $ you work so hard to earn simultaneously. It doesn't have to be all or nothing.
Could have missed it, but is rest of family or at least spouse on board with plan? Don't know if there is a Mrs FarmerJohn, but if there is, she needs to have the same goal. You're altering her standard of living as well and she has been part of creating the mountain so needs to be part of whittling it down.
No idea, none of my business really, and entirely your decision.....just going off what you've written. But this is what your scenario sounds like to me..... You've just been diagnosed with a badly sprained ankle. Having a sprained ankle sucks. You go see the doctor and he has 3 treatment options available:
1. New surgery technique that will have your ankle back to 100% and pain free in 2 weeks. The surgery is quite painful and due to the nature there is no medicine to alleviate that pain you can take for a couple days following it. The remainder of the recovery period is also very painful, but more manageable. But, exactly 14 days from surgery you have a good ankle and 0 pain.
2. He can immobilize the sprain and treat with various medications to aid in healing and pain. It will take 4 weeks for you to fully recover. There will moderate but tolerable pain the entire time. But exactly 28 days from the procedure you will have a good ankle and 0 pain.
3. He can give you a stronger pain med but do nothing to help heal the ankle. It will take you 6 weeks to fully recover. It will heal on its own over time BUT you have to completely stay off of it or it will not heal. In fact, any time you try to walk without crutches or overdo it, that adds 2 days to your recovery time. But if you follow his instructions you have only mild pain throughout the recovery time and exactly 42 days later you will have a good ankle and 0 pain (as long as you follow the instructions to stay off it).
You are choosing option #1. Your ankle, your choice, and many people would agree, suck it up for 2 weeks no matter how badly it hurts, you are where you want to be in the least amount of time. However, options #2 and #3 are not without merit and need to be evaluated. We all have various amounts of pain tolerance.
From the information you have provided, you could very well do option #3 or a variation of it. Simply stop acquiring new debt, develop the financial discipline to build up the emergency fund, snowball debt, don't buy it if you can't write a check for it, and still get to where you want to be. Will just take longer. I'm not saying this (or somewhere in between) is what you should do - just food for thought.
How do you decide which path is best for you? There are some future considerations that come into play. Because just being debt-free (or only having a mortgage) is NOT the end goal. If you woke up tomorrow morning and all that debt was magically forgiven, what would be different? Where would that $ servicing the debt today go tomorrow?
If you can honestly say 100% of what I'm paying out today to service debt would go into my long term investments, then option #1 definitely makes the most sense. Start channeling that $ into wealth building vs debt servicing X years sooner so it has that much more time to grow.
But what is reality? That debt is magically all gone. Yay. Now what happens? Do you switch from Natural Light to Guinness? Is dinner after church at Ruth's Chris instead of Olive Garden? Is the next truck Ford Raptor instead of F150XLT? When the kitchen counters need replaced does a similar laminate get installed or granite? You see what I'm getting at..... And I'm throwing it out there based on my experience and having that "I want it, I buy it mindset". You can easily divert the $ going toward debt today to other stuff that is not building wealth. So if that's the case, why choose option #1 and suck up all the pain if the end result isn't building wealth?
But can't you do both? Yes....exactly. I reduced [tremendously] debt, but still buy it if I want it. However that might mean saving up a while, selling something else, or really evaluating how badly I want it, now. And without increasing debt level - keeping it same or still declining, yeah I'm comfortable with that so will do it. So yes, I save more than when I had the huge mountain, but I certainly didn't go from every $100 a month that doesn't go to Visa goes to my mutual fund. Probably more like every $100 that doesn't go to Visa, $5 goes to emergency fund, $20 goes to long term/retirement, $15 goes to church/charity, and $65 still goes to just buying "stuff" I could live without.
So.....if you can see yourself selling the tractor, cutting cable, carpooling to work, eating ramen, whatever it takes to eliminate all debt as quickly as possible, then you're going to turn right around and take a large chunk of the $ that was going to debt to buy another tractor, restart the hobby farm, start using laundry detergent again, etc, but by saving up & paying cash I have to ask "why bother?" If you were to fast forward to a time when all debts are paid, all luxuries/extras/standard of living is returned by paying cash how is that any different than simply refusing to take on $1 new debt, and making some adjustments to allow slowly building an emergency and slowly reducing the debt mountain? You're arriving at the same place at roughly the same time. Yes I'm simplifying and the longer you're paying interest, the longer the money is going to Visa instead of you, but you stated the light at the end of the tunnel was only 4 yrs away.....
Here was another take away from my time at Motley Fool Living Within Your Means....you see LOTS of other people's stories there and it's nice to learn from others' mistakes. The people that were by far the worst off - and it was same story different person over & over - were the ones who tried to borrow their way out of debt. Meaning they would consolidate all their car payments, credit cards, student loans, everything, into a HELOC or 2nd mortgage. At first blush, great plan - take all the high interest stuff, get it all lower interest, manage one payment, and work feverishly to tackle it. Reality was the underlying cause of all that debt was still there - I want it, I buy it. So they went from 100% of paycheck going to various minimum payments/expenses to now maybe 50% and then.....time for a new car, the roof needs replaced, kid needs braces, I saw this cute sweater on sale, and then the credit cards are maxed out again, 100% of paycheck is back to minimum payments/expenses, but the debt mountain is now double! I realize that isn't your plan at all, but consider it's not at all difficult to get debt free and then get back into the same spot because what drives people [like me] to have that I want it, I buy it mentality comes from behaviors that are hard to change. A lot like a person who goes on a radical diet and loses a lot of weight.....how many then go back to eating the old way once goal is reached and put it all back on? You can go on a financial diet same way, but without that lifestyle change of eating the right foods in the right amount and an exercise routine, the results are going to be temporary. I've been through that financial diet rollercoaster enough times to realize I'm simply not going to make that fundamental lifestyle change and stick with it long term. So I reached a balance I'm happy with - some debt, some impulse purchases or splurges, while building up emergency and long term balances. So there is some discipline - debt can be no higher than $X, I want an F350 Limited but my F150XLT suits my needs - and money at an increasing % is going into long term accounts. So I'm far from perfect, I recognize my defects, and decide to manage them vs fighting the losing battle to be perfect. End result is the pile of money I die with will be smaller than if I were perfect. It's still going to be a respectable pile - and I'll be just as dead either way.
