Are you stressed about finances? Scared about how you're going to pay for Christmas? Well, here's some encouragement for you - that's NOT a get rich quick scheme. It's hard work - but it WILL work.
Well, anyone who knows me knows that I'm OBSESSED with Dave Ramsey - the money guy. Basically he has this program of baby steps that you follow and you get the HECK out of debt!! We've been at it for about one year and this Money Monday is just a testimony to how it works. You gotta know the plan we're following if you're gonna respect any opinions I have.
If you're interested in trying it out for yourself, take a look at daveramsey.com and find a radio station in your area on his site. You'll be hooked. You can get his books The Total Money Makeover or Financial Peace Revisited at the library.
His baby steps are a lot of common sense, but follow them - and you'll be a happy camper, especially in this economy! No time like the present!
Before starting them, you must become current on your bills. What if you don't have enough money? Bite the bullet - get a second job, start selling stuff on ebay and craigslist, get rid of cable, internet, netflix, shut off lights, stop eating out, use coupons. Whatever. But, you've got to get mad enough to DO SOMETHING!
Then, you create a budget.
Step 1: Baby Emergency Fund $1000
Step 2: Debt Snowball - list debts from smallest to largest balance and pay all extra money to smallest balance while paying minimums on the rest. As you pay bills off add the amount you were paying to the next smallest balance and so on until you're DEBT FREEEEEE!!
Step 3: Fully Funded Emergency Fund - 3-6 months of living expenses
Step 4: 15% income into retirement
Step 5: College Savings for Kids
Step 6: Pay off the mortgage
Step 7: GIVE GIVE GIVE and build wealth!
How are we doing?? We started last June 2007 with $34,000 in school loans. That's it (but not including our house). We've never been into credit cards. As of today, almost a year and a half later, we've paid off almost $20,000! As of Friday, we'll have just about $14,000 left and my husband's last school loan will be paid off. All we'll have is mine left. THE PLAN WORKS!! You DO NOT have to make a ton of money to work the plan. Go, try it, listen to the radio show...do it...I dare you. What've you got to lose - except a bunch of debt??