We are continuing money/finance week this week as well, since we have a couple of amazing guest bloggers and other money saving ideas! Here is Ruth to start us off!
Ruth is an amazing mother to 5 adorable children (including twins) ! She and her husband are the ultimate goal setters and she is the perfect person to review the principles that Dave Ramsey puts forth in his book "The Total Money Makeover". Here's what she has to say:
If you want to buy the best ingredients for a strawberry tart, would you head to the hardware store? If you wanted the best advice on which TV to buy would you visit the baby clothing department?
No and no.
The same is true for getting financial advice.
The best way to get out of debt and build wealth is to get advice from someone who did just that—from someone who is out of debt and is wealthy! Keeping in line with many principles found in Elder Marvin J. Ashton’s pamphlet “One for the Money: Guide to Family Finance”, (which you can receive for free, see below) Dave Ramsey’s book “The Total Money Makeover” is a must read!
In “The Total Money Makeover” Dave guides you step by step on how to become debt free through his six “baby steps”. The first steps focus on getting out of debt and the latter steps are geared towards building wealth and helping others.
In following the baby steps, Dave will first teach you the importance of quickly building a $1000 emergency fund to prep you and help cushion the unexpected emergency expenses as you tackle your debt. Next, he advises attacking the smallest debt first while making minimum payments on everything else. After the debt snowball is rolling and all of your debts are paid off except your house, Dave maps out the rest of the course: building a three to six month expense-only emergency fund, paying off your house, funding kids’ college funds, saving for retirement, and giving to others.
In “The Total Money Makeover”, you will also read about Dave’s personal experiences with getting out of debt, along with other people’s personal struggles and successes in their journey to financial freedom.
If you are serious about getting out of debt, and are ready to be debt free in two to three years, you need to follow Dave’s plan. I love “The Total Money Makeover”; I’ve learned the specifics about how to get out of debt quickly and how to build wealth one month at time. Plus, the book is a great motivator and makes me excited to get the paycheck every two weeks so we can pay off our loans! Sacrificing small luxuries and being intense on eliminating debt for just a short time will bring long-term benefits.
After we finished our undergraduate degrees and my husband attended four years of graduate school, we had accumulated about $37,500 in student loans. My husband’s “first job” started in August of 2008. That October, with back-up of a $1000 emergency fund, we started our personal debt snowball. We have paid a little more than $20,000 of the debt off and are on track to being debt free November 2009. To make it even more exciting, we canceled and cut up our credit cards in January.
To make our situation a little more personal: Ranging from newborn to 5 years of age, we have two boys, twin girls, along with our new baby boy who is a preemie in the NICU. Everyone can become debt free in any situation! For our situation, here are some things that my husband and I do together that are quickly helping us to become debt free:
Create a budget every month and stick to it
¡P Review the budget often—it helps me curb spending and impulse buys!
¡P Plan a menu for a whole week before going grocery shopping once a week
¡P Spend $300 a month on groceries (I bake from scratch) and $50 on food storage
¡P Live without cable TV
¡P Rarely go out to eat
¡P Have a decent clothing budget—for us $75 a month works well, and we sure use it!
¡P Part of a family cell phone plan with my sister
¡P Drive a paid-for 1997 mini-van (that is our only vehicle)
¡P Husband will often bike to work
¡P Kept Christmas to a minimum, and we always will (my husband and I didn’t buy each other any presents last Christmas)
¡P No “vacations” this year
¡P Listen to The Dave Ramsey Show—find a station in your area
¡P Communicate
¡P Communicate
¡P Communicate
¡P Did I mention that communication was important?
Communication and goals are very important. Some of our goals are: being debt free this November, saving up a 20% down payment for a house, and being millionaires when we retire.
If you want more reading, I recommend another one of Dave Ramsey’s books, “More Than Enough”. Also, go here and get the free pamphlet, “One For The Money: Guide to Family Finance”. Even shipping is free!
Remember, if you want to become debt free and build wealth, follow the advice of those people who have done just that.
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1 comments:
What a great blog, thanks Ruth. The thing I like about those principles is that they're simple and I've heard them over and over again. We have a budget, but I stink at following it. We aren't big spenders, but we could cute out plenty of luxuries. (we buy cable for the Jazz season) We're both on the same page with finances, but I can't seem to get my grocery bill to go down. Neither of us is into gift giving between ourselves, but we do splurge every once in a while. Kudos on cutting up your CC's. I'd be scared too even though we don't use them heavily.
How do you find time to bake with 5 kids? I can barely keep my house clean and I think I'm pretty organized. Thank you for the tips, I'll look into getting that book.
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