The past few weeks, I've been casually reading Dave Ramsey's Total Money Makeover. At least the first half of the book was pretty much not news for me. But my mom loaned it to me about a year or so ago so I decided to finally make a point to read it.
The first, pre-first really, step is to get current on all payments. We are already current. Luckily we haven't had anything major come up and are able to be current on our debts. Baby Step 1 is to save up a $1000 emergency fund so we never have to borrow money ever again. We already had a $1000 in an emergency fund. The checking account we started when we got married required a minimum balance of $1000 for some promotion they were doing and I just have always pretended it wasn't there.
Baby Step 2 is to payoff all current debts by starting with the smallest debt first and gradually adding the payments you used to make on the smaller debts to the larger debts. We've pretty much been doing that for months and I made the final move and pulled money out of our savings account to finish paying off all of our accounts. It wasn't an easy decision to make, but Ramsey makes a lot of sense when he says that paying interest on a debt costs more than you make on the money in the bank.
So, today I set things into motion. Checks will be cut/sent on Monday. By the end of next week, we should be debt free!!!!!!!!!!!!!!!! No car payments, no credit card and we can start saving up for our Security Emergency Fund. For this Baby Step, you have to save up 3-6 months worth of expenses. Figure out what it costs for your family to live for 3-6 months and save up that amount.
This sounds like magic to most people. Follow his steps and retire as a millionaire or near it. If you start at 25, you could retire a multi-millionaire. I just don't wanna eat cat food. I gave up my guaranteed job for life and my retirement in Illinois to follow a soldier. We will most likely move one or two more times before he retires and I will have a few pesos in teacher's retirements all over the country. I really can't count on his military retirement because if he dies, I get half of his half of his base pay. That might be enough to cover health insurance, MAYBE.
But just being able to talk about finances, decisions together has made our marriage stronger. I don't know that what Ramsey says is earth shattering. My parents were fantastic stewards of their money and taught us all pretty well, but maybe you didn't have that growing up or have made some poor choices or just don't know what to do.
I am really interested in the next section, learning how to invest in our future. We need some sort of financial plan. The sooner we get started the less painful it will be. I do know that it feels good to have a plan and be doing something more specific than just thinking about it.
The first, pre-first really, step is to get current on all payments. We are already current. Luckily we haven't had anything major come up and are able to be current on our debts. Baby Step 1 is to save up a $1000 emergency fund so we never have to borrow money ever again. We already had a $1000 in an emergency fund. The checking account we started when we got married required a minimum balance of $1000 for some promotion they were doing and I just have always pretended it wasn't there.
Baby Step 2 is to payoff all current debts by starting with the smallest debt first and gradually adding the payments you used to make on the smaller debts to the larger debts. We've pretty much been doing that for months and I made the final move and pulled money out of our savings account to finish paying off all of our accounts. It wasn't an easy decision to make, but Ramsey makes a lot of sense when he says that paying interest on a debt costs more than you make on the money in the bank.
So, today I set things into motion. Checks will be cut/sent on Monday. By the end of next week, we should be debt free!!!!!!!!!!!!!!!! No car payments, no credit card and we can start saving up for our Security Emergency Fund. For this Baby Step, you have to save up 3-6 months worth of expenses. Figure out what it costs for your family to live for 3-6 months and save up that amount.
This sounds like magic to most people. Follow his steps and retire as a millionaire or near it. If you start at 25, you could retire a multi-millionaire. I just don't wanna eat cat food. I gave up my guaranteed job for life and my retirement in Illinois to follow a soldier. We will most likely move one or two more times before he retires and I will have a few pesos in teacher's retirements all over the country. I really can't count on his military retirement because if he dies, I get half of his half of his base pay. That might be enough to cover health insurance, MAYBE.
But just being able to talk about finances, decisions together has made our marriage stronger. I don't know that what Ramsey says is earth shattering. My parents were fantastic stewards of their money and taught us all pretty well, but maybe you didn't have that growing up or have made some poor choices or just don't know what to do.
I am really interested in the next section, learning how to invest in our future. We need some sort of financial plan. The sooner we get started the less painful it will be. I do know that it feels good to have a plan and be doing something more specific than just thinking about it.
LOVE DR! We are debt free except the house and the influx of medical bills that come with having a child :) (Tubes/adenoids surgery). We fall off from time to time (Thanksgiving until now!), but we are getting back on the wagon and saving up again. And plowing money at the house as fast as we can!
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