"Live like no one else now so later you can live like no one else." -Dave Ramsey
This is one of my favorite quotes when it comes to money! It is so so accurate.
Money.. many find it extremely hard to talk about it. But if it's an issue at all in your relationship or family then you need to talk about it that much more!!
I do need to preface this post with our money background. David and I were both extremely blessed by being raised by money conscious, money smart, frugal, and caring parents. Caring? Well yeah, as in they were tight.. but we always had a roof over our heads, we always had clothes that fit, and we never went without a NEED. Now don't get me wrong.. we went WITHOUT. Trust me.
I can remember many days, especially Saturdays after 4:30 mass begging mom and dad to go out to dinner- and the answer always being no. And when I was younger it ended with me in tears.. I just didn't understand. It wasn't fair! I have many memories of my parents saying "No". Whether it was the electric barbie car that we begged for, the new clothes we'd whine for, or the Europe trip that got cancelled due to my dad's being laid off-- we went without. My parents are a great example of Dave Ramsey's quote. And I can see that now (my nephew, got an electric SUV for Christmas... talk about not fair! :) )
Things didn't change in our household as I went up through school- they got even tougher on me when it came to money. I was blessed enough to get a truck to drive passed from my uncle to my grandparents and then to me.. but the kicker was- I paid for gas, insurance, and anything else car related. I also started paying for my cellphone bill in high school. And if I went over my minutes (can you believe that, minutes!) in junior high then I had to pay up to my parents. I paid for homecoming and prom dresses, movies with friends, graduation announcements and senior pictures. Talk about learning how to budget and pinch pennies early. It wasn't all fun then but I am now so thankful for my parents "training" me for the real world. Now I know we can't help how our parents "money raise" us so let me get off my tangent. So when Dave and I got married- we were one, and our finances became one. We received a "wedding gift" the fall of our first year of marriage from my parents. It was to attend financial peace university at a neighborhood church. "Gee, thanks guys! You really shouldn't have". But we're so glad they did!
https://www.daveramsey.com/blog/tired-of-keeping-up-with-the-joneses
So we attended the class- boy do I have stories about some that were in the class with us. But again.. that's another rabbit hole. Dave Ramsey's class can start you from scratch (like many in our class) or can guide those like David and I who have finances a solid financial background. First, I'd recommend checking out his website or checking out the class. It is God based.. so there is a lesson on tithing.. but whether that's for you or not- the rest is applicable to all! If not, check out his 7 baby steps at least.
- Baby Step 1 – $1,000 to start an Emergency Fund
- Baby Step 2 – Pay off all debt using the Debt Snowball
- Baby Step 3 – 3 to 6 months of expenses in savings
- Baby Step 4 – Invest 15% of household income into Roth IRAs and pre-tax retirement
- Baby Step 5 – College funding for children
- Baby Step 6 – Pay off home early
- Baby Step 7 – Build wealth and give!
We all think no way will we have an emergency-- think again! And especially if you're a homeowner.. it's always one crisis after another. If you've already got that $1.000 untouchable emergency fund-- YAY!
Step 2- IS HUGE!!! And we will be completing our debt snowball this DECEMBER and we couldn't be more excited!! If anything check out his info on debt snowball! When we first got married we had- 2 federal loans, a loan to david's dad, a loan to my dad, (yes we did those to ourselves.. because we chose expensive Otterbein, but without it, we wouldn't have met) his car payment, a hot tub payment, and soon after a house payment. That may seem small or big depending on who you are. Thankfully we were blessed to not have any credit card debt ever. We are not perfect "Dave Ramsey examples". He advocates for cash envelopes. We tried it it a couple years ago right after completing the class but carrying cash was not realistic for us and we love that we get our 5, 3, and 1 % cash back on our Mastercard. He also advocates for only purchasing things you can actually BUY. We couldn't really buy either of our cars outright.. but we did get the shortest loan time and we overpay every single month. And mine was paid off in less than a year.
We just refinanced our 4 bedroom house last week after being in it less than 3 years to move to a better interest rate and to switch to a 15 year loan. Our goal is when we move again one day, we want to have it paid off! (talk about a large chunk for our next down payment) P.S. --> go for it, buy the house instead of rent! It's just a better financial choice.
So how did we do it..? Just after 3 years will we be "debt free" (minus our mortgage) and we're darn proud of it being only 25 and 26 years old. And this year, I landed a position in my dream district so I went from full time to part time teaching... so things got even more serious when it came to budgeting.
- We have a budget meeting every month. We sit down, talk about the last month, calendar and identify where the bulk of our money will be going in the upcoming month. We PINCH! We use coupons all the time. We use gift cards with coupons. We split meals when we go out (helps wallet and waist size!) If I'm drinking a peppermint hot chocolate- I'd bet you our savings account that it was paid for with a gift card.
- We go where the DEALS are. If we ever see a movie- it's on $5 night. If we go out, we aim for happy hour. We now only go to our secret Mexican place with $8.99 margarita pitchers instead of the big chains, we take the surveys on the bottom of receipts to earn free things or discounts on our next visit
- We have a white board on the fridge that gets updated daily (if not, we do it on Sunday nights when my alarm goes off at 8pm) Check out our white board- these are the things that waiver. Our electric bill, phone bill, water bill, and mortgage payments are pretty static so they're not on the white board.
- We have INDIVIDUAL money and can't say anything about the others' money. I just bought a new pair of shoes. (I have a shoe problem) But David can't say anything about it if I'm within my $100. If he goes golfing.. it comes out of his money. If I get my nails done.. it comes out of my money for the month. There is no "gray" area in our budget. It used to be $50 a month until recently and let me tell you, that was hard! If I want to save up for something big then I can do that by accumulating money from various months.
- We meal calendar weekly to know exactly what we're going to eat throughout the week. This means we don't just aimlessly grocery shop and we can download coupons for things we are buying.
- We are on a zero based budget (check out the website for more specifics) but this is a life saver! David made it on excel and we keep it on the fridge so it's easy to update as we spend.
As many are still in the mood for making 2018 better- I challenge you to learn, dig deeper, have the conversations with your loved ones, and get started. It's amazing how big your smile is when you get the notification that something is PAID OFF or that you have 5 figures in your savings account!
Check out my next post for our top EASY ways to save money and stop overspending!
Check out the class that led us to success:
Dave Ramsey's Financial Peace University and you can take it online as well and have access to materials throughout your financial journey! And I'd be happy to advise you in any way I can!
leave the "eh", the debt, the stress, and the fights behind and find peace in your finances!
hugs, abi
