I found Dave Ramsey years ago and it really helped me get my shit together but honestly I fell off the bandwagon a time or two. This year my goal is to really follow his baby steps toward a better future for us. His baby steps are made up of the following.
1. Create a budget, cut up all the credit cards, and save your baby emergency fund of $1,000.
2. Pay off all debt using the debt snowball. The debt snowball means listing your debts from small to big. Pay only the minimums each month except for your smallest debt. Whatever money is not used in your budget is your snowball. You use this to start paying towards your smallest debt.
3. Save 3-6 months expenses for your emergency fund.
4. Save 15% of your household income to retirement.
5. Save for college
6. Pay off your house
7. Be wealthy and give generously.
Your can find more about the baby steps
here.
We’re on baby step two and likely will be for the entire year. Our debts are made up of credit cards, a car loan, a camper, and student loans. Our debts total well over $100k. This means we will be here for quite awhile but once we pay off a lot of this stuff our snowball will be really good. Right now our snowball is about $800 per month with a household income of $6840 a month takehome. This amount is after insurance. We have three kids. Our budget looks like this...
BILLS $3155
DEBT $1963
MONTHLY SPENDING $605
SINKING FUNDS $300
SNOWBALL $817
I heard about Dave Ramsey on baby center's
We Are Debt Free group years and years ago. The ladies these are so inspiring and helpful! They definitely serve as motivation to be better at finances and to help set and meet my goals. Dave Ramsey also has a podcast that I have been listening to. It is so interesting and helpful. You can find it on iTunes or the podcast app on your phone!
Feel free to let me know if you have any questions! You are welcome to comment here for follow me on
Instagram and message me there! I'd love some accountability partners. I also plan to update everyone on our debt free journey as we go. I will paste the budget template I use below. It is more detailed than the above as I wanted to just give y'all a high level look at our finances.
BILLS
mortgage/rent
garbage
cable/Netflix
phone
internet
cell phone
electric
gas
water
alarm
life insurance
car insurance
home insurance
daycare/preschool
DEBT
(list smallest to largest by total due, include monthly minimum)
car
student loan
medical bills
(add anything else you have here - credit cards, rent to own, whatever)
MONTHLY SPENDING
auto: fuel
charity
groceries/toiletries
eating out
blow money
entertainment
college savings
retirement savings
newspaper/magazine/online subscription
SINKING FUNDS
(Take the amount you expect to spend in a year, divide by 12 and set aside this amount each month in savings.)
clothing & shoes
haircuts
pet care
gifts, parties
school expenses
household/garden
Christmas/birthdays
home maintenance (1% of house value per year)
car maintenance/tags ($75/car recommended)
medical (rx, copays, contacts, dental)
kids classes/activities
adult classes/activities
tuition
property taxes (if not included in mortgage)
adult classes
travel
AAA, etc.
new car fund