Do you need a Total Money Makeover?

I am so thankful my friend gave me this book!

The Total Money Makeover by Dave Ramsey

I truly am thankful for my friend who let me borrow her copy of this book. I love personal finance, I think it's fun. But, it was difficult to find a plan that really worked for me. Reading this book was just what I needed.



The first few chapters talk about money myths and breaking them open to expose them for what they are. There are 6 "Baby Steps" in this book to follow that will get you to financial freedom. Baby steps because it's difficult to jump in and all of a sudden be a financial genius. If we all were, we probably wouldn't have so much debt. (As I am typing this the U.S. National Debt clock is at $14,987,670,773,000 (approximately, I can't keep up!) That is roughly $49,000/citizen!!!) I think it's time we all get a hold of our debt. Reading this book has given me the tools for me to start tackling my debt!


The first step is to gather a $1000 emergency fund. NOW, you may be saying, "But that's difficult and will take some time!" That's alright! It's a great first step. It took me some time to scrape together a whole bunch of little amounts of money to get step one knocked out. (I kept looking for ways to cut back spending. It took a while and some effort, but I found there were a lot of "wants" that I confused with necessities.) 
  Within that chapter, the book talks about how "Murphy" may come to knock you down when you are trying to save your emergency fund or on step two. They call it "Murphy" due to Murphy's law "What can go wrong, will." It always seems like when you're getting ahead that something may come along to try and slow you down. But having this emergency fund in place, will help slow down, or hopefully, stop Murphy from knocking at your door. This will create a good buffer in case something happens while you are working on Step 2...


Step two is your Debt Snowball. I really like the "Debt Snowball" plan. I've heard it before, where when you pay off one debt, use that payment amount added to your next targeted loan to pay off to get it paid off faster. (EXAMPLE: I put $100 per month towards my credit card. Now, lets say I just paid off my credit card and I next want to pay off my furniture loan. I will take the $100 I was used to paying toward my credit card and adding it to my $80/month furniture payment, thus making a $180 payment/ month to pay off my furniture even faster. Therefore, getting me out of debt faster and paying less toward interest!) SIMPLE ENOUGH RIGHT. Here's the difference! In all the personal finance articles I've ever read, they tell us to pay off our higher interest loans first. Now, that is a good plan. BUT, this money makeover says to pay off the loan with the lowest BALANCE first. WHY??? We all like to feel like winners. Once we have one paid off, it will make us feel good and excited and it will keep our spirits up to keep at it. When I just paid more toward the higher interest ...it just kept seeming like nothing was getting accomplished, numbers lowered, but...it just made me sigh and paying off the debt felt so far away. But, by paying the one with the smallest amount off first, it keeps us motivated!

I'm still on step two. I JUST finished step one and it took me some time to get there, but you can get there too! 


If you want to read more and learn the rest of the steps, read lots of real-life stories from many people who have taken "The Total Money Makeover" challenge, stories from all different parts of the challenge, and find out all the ins-and-outs of it all, check out "The Total Money Makeover" by Dave Ramsey! :)

LETS KNOCK OUT OUR DEBT TOGETHER!!!

My Emergency Savings: (have/goal amount)

1000/1000   (Woo! Step One, check.)

My Debt as of Today

Credit Card: 625.51
Furniture Loan: 1,228.94
Car Loan: 9,610.48
Total:  $11,464.93 (YIKES!)

Other Money Goals: 

College Book/Supplies: 98.00/500  (402.00 to go!)

------->(hoping to get this goal done by Fall '12 when school starts)