Since I don't have my notes with me from my Tuesday night Financial Peace class, I will just give you a nugget that REALLY stuck out to me and made my night as my friend was going thru the lesson with me.
She said that at some point I would be putting at minimum 15% of my pay (before tax) into my 401K. To which I responded, "But what about my bills?" Her reply? "Your bills will be paid off then and all the money you make is YOURS to DO WITH WHAT YOU WANT!!" Of course, that moment was me having a blonde second but her response floored me and TOTALLY made me that much more excited to be completing the Financial Peace course.
Guys, after I get my $1,000 emergency fund and after I get 6 months worth of bill money saved up (for emergencies) I get to KEEP all the money I make.
But not only will I keep it, I can give it, donate it, buy people nice things, etc etc etc. What I've always wanted to do but have been constrained because I didn't have the money!!!
Isn't that exciting?!
If you haven't heard of Dave Ramsey's Financial Peace Plan, check it out. If you don't have the funds to spend on it, try to find a friend or family member who has the information and who is willing to share. It is well worth your search or your investment!!!!
Sara
Showing posts with label Dave Ramsey Financial Peace. Show all posts
Showing posts with label Dave Ramsey Financial Peace. Show all posts
Friday, February 24, 2012
Wednesday, February 1, 2012
Dave Ramseying My Finances - Session One
I mentioned in the post before this that a friend is helping me with my finances by going thru Dave Ramsey's plan. Well, I decided to share with you the bits and pieces I jot down from those sessions. I took a trusty notebook and pencil over with me to write down things that I deem important.
Please note that I will not put things up here that are not available already for free on Dave Ramsey's website.
Session # 1
Baby Steps (These 7 baby steps - if consistently practiced- will leave you debt free)
1 - Have $1,000 emergency fund in a Money Market Account
2- Pay off all debt that you have except for your home
3 - Have 3-6 months expenses in savings (you will add this money into your emergency fund after you get your emergency fund up to $1,000)
4 - Invest 15% of your total income into Roth IRA's and Pre-Tax retirement
5- Begin a college fund for your children
6 - Pay off your home early
7- Build wealth and give (this is when your investments bring in more money for you than your job does).
Completing all these steps should take between 15-20 years. When I heard this I was like, "Oh No!!" But that really isn't that long a time.
Next came the list of things that you should be saving for:
1- Emergencies
2 - Purchases (should pay all purchases in cash)
3 - Wealth Building (investment)
One thing that really stood out to me as my friend was going thru the lesson with me was that all this requires DISCIPLINE!!!!! This is something we all need more of and is the key to making this plan work.
Something else that we went over was that if you have a 401K, you should STOP adding money to it until you get all of your bills paid off. At first this suggestion was foreign to me and I was very nervous but the more I thought about it, the more it made since. 401K's continue to grow (since they're based on stocks) or lose so whether I stop adding money for a few years or not, it's still going to go up or down.
Towards the end of the session, my friend printed out this Quickie Budget which I filled out. Then she pointed me to the very very advanced budget that she wanted me to have completed by our next session. Both budget forms are at the link.
So, that's what I learned in my first session. I hope this has given you some ideas and resources to begin your own finance plan.
Let me know your ideas, comments, concerns,etc.!!
Sara
Please note that I will not put things up here that are not available already for free on Dave Ramsey's website.
Session # 1
Baby Steps (These 7 baby steps - if consistently practiced- will leave you debt free)
1 - Have $1,000 emergency fund in a Money Market Account
2- Pay off all debt that you have except for your home
3 - Have 3-6 months expenses in savings (you will add this money into your emergency fund after you get your emergency fund up to $1,000)
4 - Invest 15% of your total income into Roth IRA's and Pre-Tax retirement
5- Begin a college fund for your children
6 - Pay off your home early
7- Build wealth and give (this is when your investments bring in more money for you than your job does).
Completing all these steps should take between 15-20 years. When I heard this I was like, "Oh No!!" But that really isn't that long a time.
Next came the list of things that you should be saving for:
1- Emergencies
2 - Purchases (should pay all purchases in cash)
3 - Wealth Building (investment)
One thing that really stood out to me as my friend was going thru the lesson with me was that all this requires DISCIPLINE!!!!! This is something we all need more of and is the key to making this plan work.
Something else that we went over was that if you have a 401K, you should STOP adding money to it until you get all of your bills paid off. At first this suggestion was foreign to me and I was very nervous but the more I thought about it, the more it made since. 401K's continue to grow (since they're based on stocks) or lose so whether I stop adding money for a few years or not, it's still going to go up or down.
Towards the end of the session, my friend printed out this Quickie Budget which I filled out. Then she pointed me to the very very advanced budget that she wanted me to have completed by our next session. Both budget forms are at the link.
So, that's what I learned in my first session. I hope this has given you some ideas and resources to begin your own finance plan.
Let me know your ideas, comments, concerns,etc.!!
Sara
Dave Ramseying My Money
A very sweet friend from my church asked me if she could help me overhaul my finances (since she saw the posts I've been making regarding money). Her family uses the Financial Peace Plan put out by Dave Ramsey.
As you are probably aware if you have read any of my posts, I am trying to get my finances in order so in short I don't have to worry about money! As I've mentioned, I'm a girl, and I love to spend money on cute things as well as necessities. That's ok as long as I'm not overspending which I have tended to do these past two years.
I suppose that I can trace my unwise handling of money to my second credit card which I got the end of 2010.
Since I was a late teen, I have had one credit card. And I really think that all young adults should start out with one to build up credit (disclaimer: Once I am done going thru the Dave Ramsey Financial Peace Plan, I may say that I don't think it's a good idea).
I had always used the card for emergencies, or for certain specefic purchases that were a little more than my cash allowance. The one thing I did that saved me from debt for many years was that right after I made a purchase on my card, I would write a check in my checkbook for that amount and deduct it so that when the credit card bill came, I would have the funds to pay for that purchase.
I continued on like this until 2010 when I got a new credit card.
For some reason, my spend mode kicked in big time and I began charging, charging, charging and while I might write out a check here and there for some of the purchases, for the majority I didn't have the funds to cover the purchases. I feel bad saying this but there were many bills that I had to dip into my savings to pay off (because I didn't want to have interest or late fees). The only good thing that I can say about that time was that I wasn't accruing interest (which is NOT a good feeling) or late fees.
Then, my savings became depleted because of using it to pay off large credit card bills filled with (mostly) unessary items. I had a decision to make. I continued using my cards, not realizing the consequence. About September of 2011, I began to have a bill accruing interest =(. I'd NEVER had that before in my life so it wasn't a good feeling.
Ever since then, I have been trying to handle my money better but it never really clicked until I saw how quickly debt could pile up (especially when using credit cards).
That's the back-story to me learning from Dave Ramsey's Financial Peace.
Even though I've only had one session with the friend from church, my thinking is already beginning to change and I look forward to the next lesson.
It's hard for me to share most of the things above but I really do want to help other young people out. If I can spare you from debt by my mistakes, that would be lovely.
If you have any questions or comments, I'd love to hear from you.
Sara
As you are probably aware if you have read any of my posts, I am trying to get my finances in order so in short I don't have to worry about money! As I've mentioned, I'm a girl, and I love to spend money on cute things as well as necessities. That's ok as long as I'm not overspending which I have tended to do these past two years.
I suppose that I can trace my unwise handling of money to my second credit card which I got the end of 2010.
Since I was a late teen, I have had one credit card. And I really think that all young adults should start out with one to build up credit (disclaimer: Once I am done going thru the Dave Ramsey Financial Peace Plan, I may say that I don't think it's a good idea).
I had always used the card for emergencies, or for certain specefic purchases that were a little more than my cash allowance. The one thing I did that saved me from debt for many years was that right after I made a purchase on my card, I would write a check in my checkbook for that amount and deduct it so that when the credit card bill came, I would have the funds to pay for that purchase.
I continued on like this until 2010 when I got a new credit card.
For some reason, my spend mode kicked in big time and I began charging, charging, charging and while I might write out a check here and there for some of the purchases, for the majority I didn't have the funds to cover the purchases. I feel bad saying this but there were many bills that I had to dip into my savings to pay off (because I didn't want to have interest or late fees). The only good thing that I can say about that time was that I wasn't accruing interest (which is NOT a good feeling) or late fees.
Then, my savings became depleted because of using it to pay off large credit card bills filled with (mostly) unessary items. I had a decision to make. I continued using my cards, not realizing the consequence. About September of 2011, I began to have a bill accruing interest =(. I'd NEVER had that before in my life so it wasn't a good feeling.
Ever since then, I have been trying to handle my money better but it never really clicked until I saw how quickly debt could pile up (especially when using credit cards).
That's the back-story to me learning from Dave Ramsey's Financial Peace.
Even though I've only had one session with the friend from church, my thinking is already beginning to change and I look forward to the next lesson.
It's hard for me to share most of the things above but I really do want to help other young people out. If I can spare you from debt by my mistakes, that would be lovely.
If you have any questions or comments, I'd love to hear from you.
Sara
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