With our trip to Chicago last month and the holidays coming up, JJ and I haven't actually implemented any of the things we've learned yet. We plan to finish out this year and start fresh in January. Plus, by then we will have completed the course and will have all the information we need to start moving forward.
That being said, I had an "ah ha" moment last night. We were talking about the individual baby steps in our group session at the end of class. The lesson of the night was about 401k's and college funds. I asked the facilitator if we were really supposed to be taking these steps one at a time. She said yes, at least steps 1-3. So basically that means, even though it sounds like a great idea to start saving for college now, we have lots to do first before we get to that point.
The first baby step is to save $1,000 for an emergency fund. Once you do that, you move to baby step two which is the debt snowball. The third baby step is to save 3-6 months of your income. Well,
That savings account is my security blanket. I almost look at that dollar amount more than I do what's in our checking b/c I like seeing that number increase. It's a hard pill to swallow to know that I'm getting ready to slash that amount, but JJ and I have come up with a number we are comfortable with leaving in our savings, and the rest is going to pay off our credit cards...this week!
We still have a long way to go to be considered debt free. We will have a fairly small amount left on one credit card, but according to our debt snowball, had we not decided to pay off a large chunk now, we wouldn't have had them paid off until 2016!! This way, we should have the final balance of our credit card debt paid off in about 8 months. That's a difference of almost three years people! Then we will have my car and the mortgages left to pay off, but in the meantime, we will be able to start investing more into retirement and our children's college fund.
I know a few of you asked for updates as we went through the class, and up till now I didn't really feel like I had much to share. But after last night, and my revelation, I was so excited to update you all! We aren't done yet, but I highly recommend his course for anyone looking to change the way you handle money. I'll continue to update once we finish the course and actually start to use his tactics too. I got a fire lit under my butt now, so I'm ready to go! :)
I did the same thing, $1,000 just didnt seem like enough to have in the bank so we came up with a more comfortable number and then used the rest to pay stuff off. Glad its pumping you up!
ReplyDeleteI love money makeover stories like this! Glad the class is helping. It seems like a great way to do things.
ReplyDeleteThis is why I am so grateful my husband works in finance. He gets all of this stuff and we have it all set up to keep our immediate debt taken care of and long term debt (college loans and mortgage and cars) in check as it is considered "good debt."
ReplyDeleteThanks for sharing this though. It's nice to hear a "professional" is telling you the same thing my hubs has been telling me for years LOL
That's awesome that you guys have been doing this from the beginning. I wish we had been!
DeleteThis makes total sense!! I am excited for you and that you are finding these classes useful. ..And that you are going to be debt free much sooner than you expected!! Thank you for sharing with all of us as well. Very handy!
ReplyDelete- Fiona
I love Dave Ramsey! I'm so glad you are enjoying the classes. We haven't taken any but I've read stuff off his website. We are pretty close to being debt free. Hang in there, you're almost there!! This stuff gets me excited. :)
ReplyDeleteThat's great that you are almost debt free, especially as you bring a new baby into this world. His website is pretty helpful; we have his book now too but I haven't read it yet.
DeleteThis is all so interesting! I like what you've told me so far!
ReplyDeleteThat is a great point, why I am paying student loans off so slowly? When we have enough in our savings to knock a chunk of it out.
ReplyDeleteThanks for sharing. And it is nice to know not everyone has started saving for their baby's college yet. We have like $300 in an account for her but that is it.
Congrats on the credit cards!
Nope, we really wanted to start saving but quickly realized it didn't make any sense if we still had debt. You are even supposed to save for your OWN retirement before you start saving for your children's college. The reason being is retirement is inevitable and you are the only one that will help yourself. College is not necessarily inevitable, there are ways to go to school cheaper, and the kids can help pay for it if need be. I know it seems weird to pay yourselves first, but in a way it kind of makes sense.
DeleteI am so happy to hear that this financial worshop is working for you & your family! That is so awesome! THANK GO my husband keeps me in check because I am not good with money. Being a single income family & Jay working in the construction field, we have to be extra careful in this economy. I totally understand the security of a savings account too! After you have children you always have to have money set aside for a major emergency. You just never know what could happen. I would hate so much to take from my savings account but you will be saving on the interst & buliding the savings back up with that money! So happy for you!!! p.s. I love how you said "children's" college fund :-)
ReplyDeleteUgh, that's what I'm worried about too. I'm going to the bank today and moving a large amount of money, only to write it off to someone else a short time later. It will give me a bit of anxiety seeing our savings account so low, but you are right - we'll hopefully be able to build it up again pretty quickly.
DeleteYou are doing such a great job with this class, I'm way proud of you guys! It's a great feeling when you pay off your first debt, let me tell you...it's such an amazing feeling knowing that you are working your way through the baby steps. Like I've told you many times before, DR has changed our lives and the way we handle money. Are you going to try the cash envelope system? We do that now and let me tell you, It really helped us see where our money was going. It took a few months to get the right balance in the envelopes, but we've been doing it for over 2 years now and it's helped us SO much!
ReplyDeleteIt really is! I couldn't believe how much better we both felt after realizing this. We actually tried the envelope system a couple years ago and failed miserably. We didn't understand all of his theories, I had just heard of this one. And we had an envelope for everything which just didn't work. Now having gone through his class, it sounds like it's better to have an envelope for just a few key areas - groceries, gas, clothes, personal money. We are definitely going to try again after the first of the year b/c it works! You hang on to your money a lot tighter when you actually are handing cash over to someone versus plastic. It's all emotional at that point. That's so great that you have followed his practice for this long and seen such a difference. I hope to be like you! :)
DeleteI agree completely. It's way harder to spend cash!
DeleteI SOOO want to do this. We FINALLY paid off our vehicles last September (saving us $800/month!) and until the last month or so, have paid our CC to $0. Now we have a cc balance we can't quite pay off plus a mortgage and daily expenses and I just feel like we're drowning, and I'm SO tired of feeling like that. I need to look into if he'll do a class anywhere around here someday. Thanks for the update!
ReplyDeleteOh, and biggest stress is $0 savings. F******* It all went to the mortgage down payment, then started growing again, then got decimated by IF payments, and has stayed at $0 since. Oops.
DeleteWow, I thought our car payments at $700/month were a lot. I sometimes kick myself for buying a new car two years ago with such a high payment. At least it's zero interest, that's gotta count for something right? CC debt can kiss my butt! I want to get rid of it and never have it again! I understand the lack of savings. We have it, but not for long. That's why we've had the CC debt for so long, b/c I couldn't bear to part with our savings. That all changes today though. Whaa whaa....
DeleteGood for you!!! The fact that you're taking this class and starting to do things about it shows how financially responsible you really are!!
ReplyDeleteI'm a CPA and my husband is a geek about money so we are nerd central up in herre, but yes, everything you said and are going to do is spot on! Awesome.
Thanks! It's great to hear from other informed people that we are on the right path!
DeleteI really think my husband and I should take a class like this. We're doing pretty well with our savings and keeping our debt low (other than mortgage and student loans) but I think we need more professional help with saving for retirement and our childs college fund etc.
ReplyDeletethats awesome!!! I feel like we have so much debt... not necessarily cc's but student loans, mortgage etc... ugh. one day...
ReplyDeleteWay to go!! We sadly are in similar boats and have been working on the snow-ball effect to pay off our CCs also and I'm so excited we should be debt free (except for the cars and house) in about 9 months!! I love seeing the light at the end of the tunnel. Sadly though we don't have much in savings due to trying to pay stuff off and I haven't started a college fund for my 11 months old :( Did he talk about when its time what he recommended to do for college funds?
ReplyDeleteawesome!!! we love dave ramsey too! we have never been through the class, but we have the money makeover book!
ReplyDeleteWe still have a long way to go as well, but we're trucking along. That's all you can do!
ReplyDelete