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So with the economy being what it is, I thought now would be an appropriate time to share a little something with you all that was and still is a huge help in our household.A few years ago, right after Zachary was born, Rick and I sat down and realized that in the 7 years we had been married we had done NOTHING to pay down any of the debt that we had since the start of our marriage.
It seriously was at the same level of over $60,000. Yes, that's over 60 thousand. Not including our mortgage.
We had paid off credit cards or a small loan, but had quickly managed to replace it with a car loan, home equity loan or something else. Even though those that we owed money to had changed, our overall balance had not.
At that point we decided it was time to get downright serious and get a handle on our money and so we both sat down and read Total Money Makeover by Dave Ramsey. We started hammering away at our debt, got 100% serious on getting rid of it - and did. It meant actually coming up with a budget (and sticking to it), Rick's working a lot of overtime and a second job, and making some major changes in our spending habits.
Dave Ramsey gives some wonderful principles to follow and walks you through the process step by step. If you've never listened to his show or been to his website hop on over and check it out. He also has a site devoted to Total Money Makeover.
Dave Ramsey teaches 7 principles called "Baby Steps"to help get your finances back in shape:
- $1,000 to start an emergency fund.
- Pay off all debt using the debt snowball.
- 3 to 6 months expenses in savings.
- Invest 15% of household income into Roth IRA's and pre-tax retirement.
- College funding for children.
- Pay off home early.
- Build wealth and give.
