Have any of you heard of Dave Ramsey? We bought his book called "Total Money Makeover". I originally only bought it because it was on sale & I thought it would be interesting. Truly, I thought I knew would it would take to fix our financial situation. However, this book is eye-opening! I couldn't put it down. And, it is very easy. It's all about going back to the basics & not using credit cards to pay for everything!
Here's the basics of how it works:
1. You need to get a $1,000 emergency fund in cash. Keep the cash in a safe place in your home - NOT in the bank. This money is for you to have a back-up for emergencies & not to rely on any credit cards in this program.
2. Make a budget of exactly where your money goes each month. This has to be down to the penny. Then, you make envelopes at the beginning of each month & put cash in each envelope for that amount. When it's gone, it's gone - no dipping from extras anywhere! It's amazing how much we spend on stuff that's really not needed!!
3. Make a list of all your debt starting with the smallest first. You start to pay off the smallest debt first. Not the biggest interest rate, the SMALLEST debt. There is a good reason for this! People are more likely to stick with a program if they can see results! :) Chances are that your smallest interest rate is also you biggest debt & It may seem like you're never making any progress of if you start on that one first. Stick with smallest to largest. It works!!
4. Just by paying for everything in cash, you will be amazed at how much money you have at the end of the month to put towards debt!
The plan is very simple & easy! It's just a matter of doing it & being ready for it. You may have to give up going out to eat or buying fancy clothes. For me, it's all about having peace of mind.
We have a LONG way to go....but I feel much better knowing that I have a plan. I'll keep you posted on how it's going!!
Check out Dave Ramsey's website. I've attached a link. And no, I'm not getting any kick-backs from promoting him. LOL!! It's just been a great help for us & I'm all about sharing what works!!