The Total Money Makeover
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!
posted by Carole Ingram at 11:53 PM
14 Comments:
YES!!!! I was lucky enough to be sent this book by Jess and I literally could NOT put it down. It was absolutely FANtastic!!! Mark and I are starting our makeover in Jan as well and our goals are very similar to yours. I have also seen the similarites between MM and BFL-simple, yet not easy! I love how he writes, the Christian principles its based on, all of it. It does give me hope!! I recommend it to everybody, and I can't wait to be one of those sucess stories! And believe me, we are starting at the absolute BOTTOM! LOL Keep me updated as to how its going, OK?? WOO HOO!
WOW, that's pretty cool that you guys are doing the same! AWESOME, may be we can motivate each other on staying on tract! AWESOME!
Jess: ooooh yes, I can relate to that! When I lived in NY, the heat bill was outrageous! However, it's kind of a wash out in NC cause, even though you don't pay the heat bills like in NY, we still have AC during the summer that is just blasting! So, we pay all year round *LOL*
Hopefully by the end of next week, we'll have $1000 saved for "emergency" purposes. :) I'll have step one completed.
After that, we'll tackle the smallest credit card bill, which shouldn't be more then $900.00...so, that will probably be paid for by the end of the month. (hopefully). I'm doing a "house" tour to see what I can get rid of and sell. HA!
Ooooh, I am so putting this on my Christmas list...I also got a great Christian book, "living well on one income" I work as well as my husband, and I doubt living in Cali that I would be able to quit, but the principles in the book are great, and would help us to save more and contribute more...
Jess : you are right on target girlfriend! :)
Yes, it was somewhat of a surprise for me as well...saving $1,000 v.s. paying off credit card..hmmmm I was relunctant at first but after reading more of the book, I now understand why it's so important to save that $1000 first :). Seems backwards but there's a lot of logic behind it, which now makes sense to me...I was fighting that with my husband but he's got this mind made up that he's going to get our bills paid off and he's going to do it exactly like what Dave Ramsey suggests... FINALLY, something that my husband can STICK too, so Im' not going to fight against him on this, I'm going to support him the whole way through! HA!
Well, I got great news today!!! I got a bonus check at work! It'll be invested towards my $1000 savings goal! It's almost half of what I need for this goal! THIS IS SOOOOO AWESOME!!! I could be selfish and invest it on myself or buy additional gifts but it's time to forget about the "WANTS" and focus on what we NEED and that is to be DEBT FREE BABY!!!!
Come on, who's in with me????? Let's live a Body-for-LIFE Debt Free Lifestyle! *LOL*
Who said we needed to win one million dollars, according to Dave Ramsey, it's very possible that each and everyone of us can become "self made" millionaires!
Smart thinkin', chica.
We've been putting off this "grown-up" budget stuff forever. It's time, I think.
To add to it: Is Jan. 1 the date when credit card companies, by law, charge double the minimum payment? I know it's coming fast and furious.
Oh baby, if you want an example of how not to handle your finances, vist my blog. The stress is just not worth it and you never know what's around the corner. Thanks for the advice! It really helps. Love, Persephone
PS would love to hear more!
Dave Ramsey's radio show used to play on one of our local stations. I always enjoyed listening to him because his thinking is so straight forward. His money makeover program is NOT easy, but that's why he says "you have to live like no one else (it's gonna suck), to live like no one else (the good life). Fortunately for me, I married a genius and he handles the money. Before I married him I was a MESS with money and didn't have a dime saved. Being strapped financially is the most difficult stress to deal with. I wish you the very best following this program. I know you'll do great - you've got such drive. Congratulations on your bonus - Dave would be so proud of the way your putting it to use. =)
Great Post. And this is also one of my goals for the year as well... Thanks for posting some of the info from the book!!! I think I will have to llook for the book as well.
I know this isn't how it works, but maybe when you get that $1000 saved, then you pay off the $900 credit card with the money.
Thanks to this book, we have been on our "money diet" for a while. My husband read it and demanded that I read it too, I haven't yet, but I get the gist just by listening to him preach to me all the time. It is hard to be so careful when it comes to money, especially when you know you have it, but can't spend it. I have a 4 year old van which we leased and ended up purchasing so we could pay it off ASAP. I'd love to have a nice new Toyota Sequoia, but we are so tired of those huge car payments. Everytime I see a nice new car I'd love to have, I think of the fact that we will have our house paid off in 18 years!! My husband says a paid off house is the new status symbol... we'll see.
Other than being healthy, I think achieving financial freedom is one of the best things you can do for you and your family!!! Good luck everyone!!
Is it OK for the woman to lecture the husband about money? You always hear the reverse, so it becomes an annoying but accepted societal norm. But we'd be in the reverse boat, and I'm not a nagger.
I THINK about nagging a lot, but don't let it out.
What see ye, the masses?
I need some nagging...I'm terrible with money. I am however getting a fat bonus check from the Merger and a nice tax return which will be invested into a savings account. I'm also donating my second car to a charity for the tax break as well as selling a LOT of stuff around the house I don't need...sort of a BFL for the wallet I guess :)
Dollface, just wanted to say a big-time thanks for spreading the word about Dave Ramsey and debt freedom! Dave's plan makes tons of sense, doesn't it? Good luck on deep-sixing your debt and connecting with your cash. Way to go, baby! www.debtective.com
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