With Christmas only but several days away, many of us with be left with maxed out Credit Cards and debt that will take about all year to pay off. I'll admit, we used the "credit card" quite a few times the past couple of weeks, only because we didn't have the "cash" to buy the presents that we needed to get before Christmas. My husband is getting a commission check very soon but it wasn't soon enough...so, we relied on our lovely Credit Cards! BIG MISTAKE!
Alright , I've come to a realization that our family is on the road to "failure" when it comes to finances and money. We are the "typical" american family, with a house payment, two car payments, about $10,000 of credit card/equity line of credit debts and daycare cost (this doesn't include other misc. monthly recurring bills). With this being said, we have "no" savings what-so-ever! OUCH! How stupid can we be?!? Well.... we are changing our lifestyle! 2006 is going to be the year where we pay off most of our debt (for the exception of our house payment and perhaps one car)....yes, we will pay off about $30,000 to $35,000 of debt for 2006!
To live like "no one else", you have to live like "no one else"....OH BOY, say that a couple of times, you'll get yourself confused! *LOL*
My husband and I are reading a book by Dave Ramsey (christian radio talk show host and financial advisor) called "The Total Money Makeover". Thus far, the book has been a good investment, a lot of "motivational" quotes and uses a lot of "real life" stories! He explains in simple details how his program works,...it's simple and easy to understand. In many ways, it reminds me of "Body for Life", how you must use goals and take baby steps....that the road to success is "no short cut"! It's when you have hit that "wall", where you are sick and tired of being sick and tired....
So far, by reading this book, we have the following goals to achieve for 2006.
1. Save $1,000 in emergency funds (for TRUE emergency purposes only, and DO make it HARD to get !).... this is a must before you start paying off any debt!!!
2. Get caught up! (if you are behind on any bills).
3. Set up a budjet, assigned every dollar earn towards your budget!
4. Start with the smallest debt first (this is important - helps keep you motivated since you achieve your goals faster and it's also creates a "snowball" effect!).
5. The money that you save from paying off the smallest debt should be used for the next debt..so on and so forth.... hence, the snow ball effect.
6. Save 3 to 6 months worth of savings (what you would normally earn).
7 . Pay off House.
8. Invest and Give :-)
He also recommends that if you are very tight in money and it seems impossible to even save $1,000 in emergency funds...START WORKING A SECOND JOB! SELL STUFF AROUND THE HOUSE, etc.
Oh... and dont' use credit cards anymore, don't rent/lease...... BUY CASH! :) So, if you want that nice big screen TV, this twice about financing, cause at the end, you'll pay twice what it's worth.... so, let's say you are buying a TV that's about $1,500.00 , just think that it's actually $3,000 if you put it on credit! :-)......sounds less appealing doesn't it!
I'm not getting into this topic cause I want to depress you or get you to buy the book....but I just want for those of you that are in debt and think that you can't get out of it...there's hope!! :-) We all can live a debt free life!! I'll prove it too you!!! :-) ... ( I like challenges!).. AND I will become RICH! not because I won the lottery or found out a long lost relative of mine has left me TONS of money....I will earn my living the hard way. :-)
There will be a lot of sacrifices, but in the long run, they will be worth it! Can you imagine no car payment, no house payment, no credit card payments, no student loans....just your misc. monthly recurring bills and plenty of CASH FLOW coming in each month cause you got NO DEBT! hmmmmmmmmmmmmmmmmmm NICE!!!
DREAM BIG PEOPLE! IT'S NOT ALL ABOUT BEING HEALTHY AND FIT, BUT IT'S ALSO ABOUT FINANCIAL FREEDOM, LIVE HEALTHY AND ENJOY LIFE!