For a couple of years now my sister Stacy has been begging Britton and I to listen to the Dave Ramsey CDs. We put it off and put it off because we were students and didn't have any money to budget anyways. And we didn't want to listen to him tell us not to get student loans, which was the only way to get out of Rexburg as fast as possible. Eventually we relented and listened to his course. Since Britton has gotten a job, we've "gone Dave Ramsey."Because we're living with my gracious parents, we will be able to pay off our student loans in less than a year.
Let me tell you, this guy makes sense. Here's the baby steps to his program.
1) Save $1000 to start an Emergency Fund
2) Pay off all debt using the Debt Snowball
3) 3-6 months of expenses in savings
4) Invest 15% of household income into Roth IRAs and pre-tax retirement
5) College Funding for children
6) Pay off home Early
7) Build Wealth and give
We are on Baby Step #2! The only debt we have is student loans. Luckily we've never given in to credit cards.
I highly recommend checking out Dave Ramsey. Often times when you're coming up on finishing college the only thing going through your mind is buying your first house, buying a new car, and basically getting everything you've been doing without. That's exactly what I had in mind. But you know what the truth is? If you're lucky your husband will be making about $50,000 a year with his first job. That's about $4100 a month right? WRONG. More like $3,000 after taxes. $2600 after tithing. You want a new car? Subtract $400. You want a house? Subtract $800. Payment on new furniture? Subtract $100. That leaves you with $1300, not including home, auto, fire insurance or utilities. Oh and don't forget that $350 student loan payment. You've probably got about $700 bucks left for groceries, diapers, clothes, entertainment, gas, whatever. With zero in savings. Then what happens if he gets laid off?
We really are the "I want it now generation." But we don't need it now.
Figure out before your husband graduates what you're going to do with his paychecks.
Don't dig yourself into a hole just because you want it all right now.
We are all entering into the stage of life where what we do with our money really matters. Not just for us, but our kids and our grandkids.
Be smart!
5 comments:
We like him as well. We are almost done with 2 and actually have #3 almost done. I know that it is backwards a little but we were unsure about Tyler's job there for about a year so we wanted to hold onto some cash just in case. Now that he has a more secure job we need to make a decision on what to do with that cash. Stick with it because it does work and there is nothing better that having financial freedom. Or at least I am told! :) Ha Ha
I'm a new follower! I just started the FPU classes about a month ago and it's been tough but also nice living on a budget. I got sick and the money stuff took a back burner so I'm going to try again next month!
ryan and i also have gotten involved with the dave ramsey program and i love it! it's so logical and so far works really great! :)
I really like Dave Ramsey. and I like those baby steps you shared. We also have student loans and car payments left to deal with, and I cannot wait till we are not in debt to anyone anymore.
I've heard that is an awesome book we will have to check it out! I'm so gald someone else is in the miserable stage with me of the fat kid syndrome! :)
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