Dustin Riechmann over at EngagedMarriage.com, has an insightful article about the 5 Benefits of a Debt-Free Marriage. This article is sooooo timely, as Dr. B and I are using the same Total Money Makeover methodology that Dustin and his wife used to become debt-free. The total Money Makeover is a book written by Dave Ramsey. The book gives step-by-step instructions on how to become debt-free. The major components of the process are the 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 Your House Early
Baby Step 7) Build Wealth and Give
Dr. B and I are on the end of baby step two, the Debt Snowball. My car will be paid off next month (woohoo!) and then the last credit card by December! Then in January we will start our 6 months of emergency savings. We talk everyday about how we never envisioned ourselves being debt-free, not to mention being debt-free in less than a year!
Some lessons we have learned since starting our Total Money Makeover:
- In order to become debt-free both spouses have to be on board and committed to the plan. It will not work if only one spouse believes in it.
- Communications is essential. As you open up and talk about your finances, it actually gets easier and easier.
- Don’t be afraid to sell things that you don’t need. When we sold our house we had a garage sale and made over $2,000!
- A monthly budget is central to your success. Create one and stick to it!
There will be some sacrifices, but it’s truly worth in the end. I encourage you to at least listen to Dave Ramsey’s daily podcast, read his book The Total Money Makeover, or at least check out his website, what could be the worse thing that would happen…you become debt free? 🙂
- Dave Ramsey: Plump up savings when preparing for surgery, medical bills (knoxnews.com)
- Dave Ramsey Money Lessons $1 (thehappyhousewife.com)
- Financial Peace University (bloggingforwisdom.wordpress.com)