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This post may contain affiliate links.
Are you looking to take control of your finances? Are you struggling with debt?
You are NOT ALONE! Just over a year ago our financial lives emploded. My husband had just finished school and taken a good paying job with an oil firm. Then the Canadian Oil Market collapsed and he was laid off. We spent our savings and went into debt. You can read more about our story here.
One Book Changed Our Lives!
In between searching for jobs and arguing about money. I just said enough was enough! I had heard about Dave Ramsey and watched some of his Youtube videos and heard of his success in conquering debt. So one night while surfing the web I ordered The Total Money Makeover. It was the best thing I did! I read it cover to cover and then reviewed sections with my husband. This book changed our lives!
Financial Peace University
In our new found path to get our finances in order and be as close to debt free as possible we enrolled in Dave Ramsey’s Financial Peace University. If you are
wanting needing to pay down your debt and learn how to better manage your money I suggest you take Financial Peace University. I think FPU (Financial Peace University) is great and I think every married couple and single person should take this course. Dave Ramsey teaches you so much in these classes. You learn things about money, debt, savings, building wealth and giving back that you were never taught in school. If I could afford to buy FPU for all my friends and family I would this is how great I think Financial Peace University is!
To be honest FPU brought my husband and I together financial and this made budgeting soooo much easier! I am the “nerdy” one and my husband is the “laid back” one so in taking FPU we learned to work together and budget together. We learned to be honest with our spending, where our money was going and what we were spending way too much money on. Financial Peace University and The Total Money Makeover were a blessing.
Dave Ramsey’s Baby Steps
Step One: $1,000 In An Emergency Fund
Set your budget, sell what you have to sell, get a second job. Making an extra $1,000 to put into an emergency fund should take you a month or less. Having an emergency fund is important. We actually had to use part of ours to fix a broken vehicle instead of using credit. The emergency fund is there for “emergencies, not shopping”!
Step Two: Pay Off All Debt Using The Debt Snow Ball
Compile all your debts. This includes credit cards, car loans, overdrafts, school loans and etc. Start putting all your extra money after paying “living expenses” towards the smallest bill. Once the smallest bill is paid off move on to the next bill on the list and so on.
Step Three: 3 to 6 Months Living Expenses In Savings
Set up a savings account and deposit 3 to 6 months worth of living expenses into this account. Note this is for living expenses not holiday expenses.
Step Four: Invest 15% Of Income Into Retirement
Once you have completed step 1-3 or while you are completing step 3 start investing into your retirement.
Step Five: Setup College Fund For Children
Setup a fund to help your children pay for school. As the years go by post secondary is getting more and more expensive.
Step Six: Pay Off Your Home Mortgage
Now that your debts are paid off you have extra money to put towards your mortgage. Check with your financial institution about paying your mortgage off sooner.
Step Seven: Build Wealth & Give
This step is a statement in its own. I can’t wait to get to this step.
Where We Are In Our Baby Steps
Currently, we have completed step one. We are working on step two and three consecutively on the chance that we go through a job loss again given uncertainty in our area job market. Before our job loss we had set up a college fund for our child and have left it locked and growing in hopes that he pursues post secondary education. So essential we have completed step one, we are 50% complete step two, we are actively working on step three, step four we dive into next, step five is up and running and growing, step six – we live in one of the most expensive housing markets in the country, we are opting to rent currently, step seven I can’t wait to get to this step. We have a long way to go in our baby steps but we are further along than we were a year ago and we are financially smarter now than we were.
What Have We Learned
Simple answer: lots! We have learned to work together as a couple toward our money issues, we have also learned to communicate better about where our money is going. Besides loosing a good portion of our income with job loss, we were spending a lot of money on groceries and eating out. We found that after working, commute times, picking up our child at daycare we ate out a lot. We have learned to budget, meal plan and be more creative with our spending. We have also learned to say NO. Our child is also learning a lot about the value of a dollar as he sees us go through our debt free journey. Over all again we have learned lots and not just about money, we have learned a lot about people, marketing, relationships and values.
If I can suggest one thing for you to invest your time in to that will change your life it will be The Total Money Makeover. Also, if you have the time checkout Dave Ramsey’s Financial Peace University. Both of these items are well worth looking into.
I wish you the best on your debt free journey. Stay strong and have an amazing day.