I know Rheanna has posted some about our Total Money Makeover, but I thought I would share my thoughts as well. Most Americans have heard of Dave Ramsey in some capacity. I was one of the skeptics that doubted he had any knowledge that I didn’t have. I’m an accounting major after all, so how could someone tell me how to better manage my money? I’ve read through his seven baby steps a few times over the years. They make sense, but I didn’t really understand why they should be a priority. Doing the baby steps would require discipline and lots of hard work. I just wasn’t sure I was up for it all.
Well, we borrowed the Total Money Makeover book from the Hackings and I decided to read it. I read it in a day or two and finally “got it.” It wasn’t just telling me to get out of debt. It showed me and motivated me to do it quickly. Once that is accomplished you can truly “live like no one else.” I used to think we’d “get there eventually,” but now I don’t think we ever would have.
We have more debt that I care to discuss, but most of it is wrapped up in student loans and in mortgages. When we set down and added it all up we were sickened. We have cut back on almost everything and found lots of extra money we were wasting. Paying too much for cell phone features, trying to keep low deductibles, having full coverage on a car more than 7 years old, and the list went on. After we trimmed up our waste we found an extra $200. Yay! We were so excited, but knew it wouldn’t be enough to truly crush this debt and be done.
After a couple of months of looking for various opportunities I think we are settling in on some great ones. I’ve been delivering pizza for 2 months. Next week, I’m going to start a paper route and once I’m comfortable with that will start a second route. You’re probably thinking I’m insane. Maybe I am, but Rheanna is on the same page as me, so it works. Even though I’m gone more, I think we are closer in our marriage than ever before. We see eye to eye on everything and are able to remind and motivate each other all along the way. The kids are even involved. We are teaching them the evils and annoyance of credit cards and student loans. We have paper chains that represent the debt bondage that we are in. The kids get to break the links in these chains as we pay debt off and feel closer to real freedom.
We’ve paid off 2 credit cards already! We have just one more to go and then we’ll tackle the student loan and mortgage. We will be debt free except for the mortgage by the end of next year. Then I can slow down my working intensity some as we move on to other baby steps. The mortgage will be paid off before Hyrum is through high school. I’m sure that all sounds too good to be true. It truly is realistic though.
I have had a real awakening to the fact that I’ve been a lousy steward with the money the Lord has blessed me with. I’ve been completely converted to what we’ve been taught for years, to just stay out of debt and avoid it like a plague. Very little of this is math, it’s really all motivation. I can sacrifice for a year or two and then really find happiness and freedom.
I want everyone to have the same awakening and breakthrough that we’ve had. I’m almost as excited about this as I am family history. If you are debt free you can still learn from these principles and build your own wealth. If you have any debt (car, house, student loan, credit cards) there really is an end in sight and it doesn’t have to take anywhere near 30 years. It just takes a husband and wife working together. I love my wife and all that she does to keep our family strong each day! I’m so thankful for her support in all of our Dave Ramsey “WEIRDNESS.”
An emergency fund is for those unexpected events in life that you can’t plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, and the list goes on and on. It’s not a matter of if these events will happen; it’s simply a matter of when they will happen.
List your debts, excluding the house, in order. The smallest balance should be your number one priority. Don’t worry about interest rates unless two debts have similar payoffs. If that’s the case, then list the higher interest rate debt first.
Once you complete the first two baby steps, you will have built serious momentum. But don’t start throwing all your “extra” money into investments quite yet. It’s time to build your full emergency fund.
When you reach this step, you’ll have no payments—except the house—and a fully funded emergency fund. Now it’s time to get serious about building wealth.
By this point, you should have already started Baby Step 4—investing 15% of your income—before saving for college. Whether you are saving for you or your child to go to college, you need to start now.
Now it’s time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments
It’s time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. It's really the only way to live!
1 comment:
Wowzy! You are fired up! Just be sure you remember to sleep! :)
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