#83: My Total Money Makeover

#83: My Total Money Makeover

A few weeks ago, I was out to dinner with the girls. The conversation was flitting from one subject to another, as it tends to do when we get together, and at one point, something came up pertaining to finances. I don’t remember what it was precisely, but I seem to recall launching into something about budgeting, really thinking out loud more than anything else.

It got kind of quiet for a few seconds, and then Renee said something that was like a defining moment for me: “Man, you have SO drunk the Kool-Aid.”

And indeed, I have.

Anyone who spends any amount of time around me will eventually hear me mention Dave Ramsey. If you don’t know who he is, he’s a financial guy with a daily radio show and several books on managing your finances. If you do know who he is, you know that he isn’t one to mince words or offer get-rich-quick schemes. He’s a plain-talking proponent of handling money wisely and steadily with the knowledge that doing so comes with its own built-in reward: financial peace.

“We’re coming to you LIVE from Financial Peace Plaza”, he begins the show, “where debt is DUMB, cash is KING, and the paid-off home mortgage has replaced the BMW as the status symbol of choice.”

Oh, and did I fail to mention? He has a bit of an attitude.

I first learned about Dave when he spoke at my church about eight or so years ago. He was engaging and funny and more than just a little feisty, and even though I didn’t walk away that day with a determination to apply what he was teaching, I kind of knew he was speaking the truth.

Now, let me back up for a minute. I’ll admit upfront that I have never been in significant consumer debt, and by that, I mean credit cards or loans other than a home mortgage. Early in my 20s, I built up $1,400 on a credit card, and it felt like an albatross around my neck until I paid it off. (And seeing as how I was right out of college, it took me forever.) For whatever reason, I guess God has blessed me with a very low debt tolerance. I’m thankful for that in hindsight, because I could easily have dug myself into a hole out of sheer boredom back then. Yikes! I shudder to think!

However, my downfall for a number of years was simple: lack of planning. No real plan for the future, no real savings, and a monthly budget? Pshft! Whatever! I lived paycheck to paycheck for years, so in reality, I was always one emergency away from financial strain.

But several years ago, I took a survey of my life and, more specifically, my relationship with money, and I decided it was time to make some changes. I was the proud owner of a 100% financed townhome who was rapidly approaching 40 with nothing set aside for retirement. It pains me to say that, but it’s true. It was time for a Total Money Makeover.

I cracked open Dave’s book, printed off budget forms, and set out to work the plan. As I said, if you’re looking for a get-rich-quick scheme, this isn’t it. But if you’re looking for sound advice on how to handle and relate to money wisely – which, by the way, is what the Bible teaches – well, you might want to give this a try.

So here’s Dave’s Total Money Makeover plan, nutshell version. There are seven Baby Steps.

  • Baby Step 1: $1000 in emergency fund.
  • Baby Step 2: Pay off all debt (except the mortgage)
  • Baby Step 3: Full Emergency Fund – 3-6 months of living expenses in savings
  • Baby Step 4: 15% of gross income into retirement
  • Baby Step 5: Save for kids’ college
  • Baby Step 6: Pay off home mortgage EARLY
  • Baby Step 7: Live and Give like no one else

Now, from my experience, there’s good news, bad news, and more good news. The good news is that the Total Money Makeover (TMMO) plan works. There are thousands of people who could stand up and testify to that. The bad news is that there are no shortcuts here. It’s going to take time, and you’re going to have to make some sacrifices.

But the other good news? You might be surprised to find that it doesn’t take as long as you think it will once you get going. That’s the power of momentum and determination.

I honestly can’t remember when I first started the plan, and I haven’t always done things completely by the book. I even had to back up at one point when I realized my 2nd mortgage (20% of my loan) needed to be paid off in Baby Step 2. (Boy, talk about a buzz-kill.) But y’know what? By the grace of God, I managed to pay that $23,000 off in about 16 months, plus saving up and paying cash for a car around that time period. I’m now working on BS4 with a plan to begin BS6 soon, and honestly, y’all? It feels GOOD.

So if you’re sick and tired of being sick and tired, and if you’re ready for some financial peace, I encourage you with everything that’s in me to check it out here. I’m telling you, people, it really does work. You’ll learn all about baby steps and gazelle intensity and being weird (‘cos normal=broke, y’know). And then you can join me on the TMMO forums and totally geek out by participating in the 2-month challenges with me.

*crickets*

Ahem. Or, y’know, you can just look forward to the day you get to do your debt-free scream.

“FREEEEDDDOOOOOMMMMM!”

Gives you goose bumps just thinking about it, doesn’t it?

So c’mon, man. Drink the Kool-Aid. All the cool kids are doing it.

 

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