098 Beyond Your Wedding Day Podcast-The First Step Toward Financial Freedom

by mike on November 14, 2012

098 Beyond Your Wedding Day Podcast-The First Step Toward Financial Freedom

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In this episode of the Beyond Your Wedding Day Podcast, we discuss the Total Money Makeover by Dave Ramsey.  We take a look at Chapter 6: “Save $1,o00 Fast: Walk Before You Run.”

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*The whole idea behind Dave Ramsey’s “system” is the baby steps

-The idea is to focus on one thing at a time and do that one thing excellent!

-Also, it prioritizes your focus because the steps build on one another.  They don’t work out of order

-The hardest thing about this is to trust the process.  You may be most concerned with paying for your kids’ college (step 5) because you have a 17 year old.  But if you start saving for that before having an emergency fund, then you’ll end up using the college fund for emergencies anyway.

*It is critical that you do a budget EVERY month

-That means doing one before the month begins, every month, telling your money exactly what you want it to do

-You and your spouse must work on this together if you are married

-The budget must balance: every dollar should have a name!

*Baby step 1a is to get caught up on your current bills

-this must take place first before you can even think about moving along the baby steps

-Get caught up first with your necessities: mortgage, vehicle, utilities, insurances, etc.

-Then, you can get caught up with the credit cards and other debtors

*Ultimately, for this process to work you have got to get fired up!

-All of the mechanical advice is worthless if you try to just work your way through changing your financial life without any passion

-You must get fed up, tired, pissed off and accept nothing less than getting control of your finances!

*The first baby step is to save $1,000 for a baby emergency fund

-You must have a rainy day fund because things WILL happen that you can’t foresee

-$1,00o will catch alot of the little things.  If you do have some big things happen, you should have the correct insurances in place to help cover that!

-This is for emergencies ONLY!

-Non-monthlies such as Christmas and car repairs are not emergencies, they are things you must plan for in your budget every month

-Credit cards are not a good emergency fund, break the cycle!

-The reason this step comes before paying off debt is because you don’t want to get de-railed from your plan by having an emergency come up.  If you do not have an emergency fund, you will put unexpected expenses on a credit card which defeats the purpose!

-You should be able to get your $1,000 very quickly: like in a month or two.  That may mean getting an extra job, selling something, working overtime, squeezing the budget extremely tight, or having a garage sale.

-Hide your money: in other words don’t make it easy to get ahold of

-Keep your emergency fund liquid: if you have a stock, bond, CD, savings bond, etc. cash them out.  You need the money available enough to be able to use quickly and not take on debt because you don’t want to mess with getting it

Would you like to work with Mandy and Mike one on one?  Check out the Beyond Your Wedding Day Marriage Prep Course.

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