Financial Peace - Introduction

Happy Thursday everyone! I hope you all have had a fabulous week...only one more day! I know some of you are able to be off work and school all next week for Spring Break...well BOO to you because I don't get that luxury. I'm kidding...about the BOO to you part...but serious that I don't get to have that. As an auditor, we are in busy season until mid-April and are all but forbidden to take any PTO during this time. Oh well, such is life :)

Kevin and I are in process of a Total Money Makeover (TMM)! If you don't know much about Dave Ramsey and Financial Peace University, you can check out his website here. He has a lot of information and tools to help you get started. There are multiple ways to go about it; I actually won the book, The Total Money Makeover, from a giveaway on Rachel's blog, and it has literally transformed our money thought process (as if there was one originally). With me being in busy season, our schedule is pretty tight so we were, unfortunately, not able to start a class series of Financial Peace University. I have, however, been told that this class is a MUST for all the "Baby-Steppers" and I believe it :)

You can find much more information on Dave's website, but in a nutshell, Dave walks you through the "7 Baby Steps" to complete your journey to financial peace and freedom! 

7 Baby Steps:

Baby Step #1 - $1,000 to start an Emergency Fund
Baby Step #2 - Pay off all debt using the Debt Snowball
Baby Step #3 - 3 to 6 months of expenses in savings
Baby Step #4 - Invest 15% of household income into Roth IRAs and pre-tax retirement
Baby Step #5 - College funding for children
Baby Step #6 - Pay off home early
Baby Step #7 - Build wealth and give!


Now...Kevin and I officially started TMM on January 18th, 2011. I was hesitant at first to put all of our "business" on the blog like this, and to be honest, I'm still hesitant. After talking about it with Kevin, we decided that we should lay it out, the truth, and just pray that it will inspire someone else like we were by Rachel and Jared's journey. It's kind of scary putting this all out there, but I am not exaggerating in any way when I say that the last month and a half has changed our LIFE for the better. 

As you are starting your journey to FREEDOM, first things first...you have to budget like crazy! I mean for real crazy!! Here are some of the ways we cut our budget.

Cable - We cut our monthly bill from $70 down to $40 just by lowering our plan.      
(Savings: $30/mo)
Student Loans - Since Kevin has been a substitute teacher vs. having a full time teaching position, he was able to qualify for loan deferment for a year. (Savings: $210/mo)
Hair Salon - I used to go to my hair guru every 6 weeks, alternating between a trim one time and a cut/color the next. I decided to cut out the mid 6 weeks appointment (told you it was crazy!) because it doesn't make that huge of a difference. (Savings: $25/mo) 


In addition to straight up cutting the budget, we've also gotten much more price conscious with everything...looking up ads to price match for our Walmart shopping, printing coupons, etc. There are blogs out there that help you out by outlining how to mix and match the deals/coupons to get some insane price reductions. Thanks to Rachel, these are the savings blogs I'm currently following: Bargain Briana, Discount Queens, Hip2Save, Deal Seeking Mom, and Money Saving Mom. You can save HUGE if you take the little amount of time to pull it together. For example, I got all of the items in the following picture from Target for only $7.14 !!!

Dave Ramsey also has what is called the Envelope System. Basically, anything you can pay in cash, DO IT! When you are setting up your budget, you do it so that you have every penny assigned to a certain bill, envelope, etc. (called the Zero based budget). Having the envelopes has really helped us stay in budget on the variable items. Currently, we have the following envelopes:

Groceries

Hair Salon

Pet Grooming/Supplies

Car Maintenance

Medical

Gifts

Granny (our wonderful landlord)

Personal Shopping/Misc.

FUN!

You guys, I kid you not....in only the first month and a half, this process has made us pull a complete 180 on how we view and feel about money. I understand you think there's no way you could do this, or that it's too much work, but think about the feeling you could have when you are 100% DEBT FREE!! Kevin and I literally FEEL a difference in only this short amount of time. We still talk about money every day, but our conversations have changed. Our talks about money now have a tone of hope, not of constant struggle. 

Where are you in your financial life right now? Are you willing to take this giant leap in the right direction and work hard to make a difference in your life? I hope that even one piece of information, guidance or sharing of our personal experiences will make a difference for you!!