Like I said in my previous post I'm done with school and Ross and I were so excited about being able to spend more time together. Summer is our time to be with each other more because our schedules line up more. But, we've found we're not getting that this summer, sadly and gladly. Gladly because we are doing Dave Ramsey. Last summer I found from Melissa's blog the Grocery Game. Ross and I have loved it! We buy tons of groceries for $50 a week and eat whatever we want. The key is to use coupons and combine them with sales and get it when it's cheap and you don't need it. Best thing that ever happened to our grocery budget!!! But, back on track. They have a forum where every one talks about more ways to save. While on there I kept hearing about Dave Ramsey and his book Total Money Makeover. Everyone on there kept talking about how they were paying off all their debt and never borrowing again. They were talking about how they were living financially free and not living paycheck to paycheck. I wanted to know more, it seems like that was Ross and I's life, paycheck to paycheck. We just figured it was because we were young. But, there were people I was talking to that were our age, no debt, and living financially free. So, I told Ross about Dave Ramsey and told him I wanted to read the book. Needless to say here we are doing Dave Ramsey. Ross has devoured both his books in less than 48 hours. We are working our butts off to pay off all our debt. Which isn't that much and should be done by the time I start school, probably way earlier. The crazy thing is we finished reading Total Money Makeover and felt stupid because the advice is sooo easy!! So, Ross is working at Leith and working for Wake Forest Awards and Engraving (the business the couple I nanny for own). I'm working as a nanny for Liam still and picking up as many shifts as I can at the Twisted Fork. We're not doing anything we don't need that takes money because everything is going towards debt, yes we are crazy! But, we are doing it!!! One loan down and 2 to go. We can't wait to be debt free and be able to give like never before. We've decided that we'll be here in Youngsville until we pay off the house in seven years. At least that's that goal! Now that we've read Dave's book we've promised each other never to go into debt again because God says "The rich rule over the poor, and the borrower is servant to the lender." (Prov 22:7)! It's freeing to think of not having half my income go to pay people. Here's his steps, and where we are. I'll post periodically to show where were at. But, our goal is to have step 2 done by Aug 20th, 2009!! Even though we don't see each other much, this is bringing us together more and strengthening us so much!!
Dave's Steps..
1) Save a $1000 emergency fund (or take savings down to $1000) -DONE-
2) Pay off all debt (from smallest to largest, except the house) -1 down, 2 to go-
3) Save 3-6 months of an emergency fund
4) Invest 15% of your gross income into Roth IRAs or 401ks
5) College Funding for kids
6) Pay off home early
7) Build wealth and GIVE GIVE GIVE!!
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6 months ago
7 comments:
Sounds awesome! Nick and I blessed to be debt free, due to his parents paying for school! I do want to read his book, it will be on the list sometime towards the end of the summer!!
Just Curious. Does he cover the situation of being out of debt, no credit cards, no ostentatious spending, and still can't get the bank account over a certain amount of money no matter how many checks you put in?
Also, why only $1000 in savings, what if you have more than that are you supposed to give it away or spend it? Just wondering
Ashley- It's a fantastic book! I'd recommend reading Financial Peace by Ramsey after that. Puts more meat on what the first one says. We are also blessed to not have any debts from SEBTS, however we have the Jeep and it's the last once that should be paid by the end of the month!
Davy- Ramsey does have an answer to both questions. The first one he calls living beyond your means. You spend more than you make. Ross and I were so there. Pulling from savings and trying to make every penny stretch as far as it could. There were months we barely met bills, much less date night and the rest. He tells everyone to cut back to living within what you make and if it's not enough to cover all your bills then to get a second job. We cut back and are living well within out means now. Even have extra each month to pay down our debts. Ross and I now sit down each month and do a budget, spending every dollar on paper that we have coming in before it comes in. Since Ross is commission our budget then gets listed from 1 to whatever by importance. 1)Food, 2)Utilities, 3)House/Rent, 4)Transportation, Ect... During the month number 3 doesn't get paid before number 1. Also you don't spend money on things that aren't budgeted. If something comes up mid-month that is a need then an emergency budget meeting is called you both have to agree to amend the budget. Ramsey is very well off and still does a monthly budget. Ross and I will for the rest of our lives because the budget changes month to month.
To the savings question...He says to have a $1000 emergency fund at first while your getting out of debt so that if Murphy comes to visit you don't go back into debt but you have the money to pay for the emergency. After you get out of debt that fund goes up to 3-6 months of expenses. Again so if Murphy comes to visit (Ac goes out in your house, or car wreck) you can pay for it without going into debt or if you loose a job that yall can live until another job is found. Once that fund is saved, for us we are going to save 6 months because Ross is on commission income and we're going to end up having $20,000 in our emergency fund. Once that's saved and put somewhere where it's not easy to get to but can be gotten to if need (He recommends Money Market with check writing ability), then you start saving. Saving for retirement, saving for a house or paying off a house and saving for future purchases. Everything that's going to be bough should be in cash, furniture, cars, remodels, etc. So he's not saying you can only have $1000 in savings AFTER you pay your non-house debts off. It's just before and while you're paying your non-house debts off you should only have $1000. Ramsey believes in the saying "Earn all you can, save all you can, and give all you can." God calls us to help the poor and needed, and Ramsey agrees. He doesn't say how much we need to give away or how much to save. That's up to you and God. He just wants people to give and live within their means. One of his big sayings is 'Act your wage.' Does that answer your question?
Ross and I highly recommend that you and Laura read Total Money Makeover by Ramsey and Financial Peace by him too. They changed the way we look at money and how we handle it in our life. They are both in the local library, I can almost guarantee it. Got any more questions??? And you can listen to his radio show online where all of his principles end up being talked about. https://www.daveramsey.com/
I totally understand what you are saying and they are great suggestions for spending. It seems we are not in the "total money makeover" catagory from what I am reading so far. We are living well within our budget of income and have a few thousand saved up, but cannot seem to get over a few thousand no matter what we try. We arent paying for anything right now because of living with Laura's parents and don't even spend money on groceries or fast food. We don't have an emergency fund because we never can seem to get over this hump of trying to reach 10,000 in our savings. We try to keep at least 1,000 in our checking so we never overdraft if we do spend money.
--Confused
David
But you are in the TMM, you're just past the debt pay off since you don't have any. Everyone can be in total money makeover they may just start at a different baby step as Ramsey calls them. Make a budget that's the best thing to do, then you won't spend on something you don't need and you don't need to keep money in the checking account because it'll all be budgeted. Then there will be more money going into the savings account for your emergency fund. Read the book, even though you have no debt right now. If you change the way you think about money now then you don't have to make major changes later. If you get it from the library it's free!!!!
At first we didn't think we were for the total money makeover. We made all our bills but it was just a little tight, which we thought was just us being newlywed and having a new house. We didn't like debt but thought it was something we had to have, like a car loan everyone has that! We never wanted a credit card, but ended up with a no interest one for Ross' lawnmower. Our plan was to pay it off and close it, and not get one again. Then we read the book and it changed our thinking. Never again will Ross and I borrow money. Everything will be paid in cash. There's the slight possibility of a 15 yr fix rate mortgage (to be paid off in less then half that time) but even then we hope to pay cash for every house from here on out. God used Ramsey to change our life, our family tree, and our thinking about how to steward His money.
-Kc
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