Our church is offering Dave Ramsey’s Financial Peace University. I’ve done the course on my own before, when I was married and am quite familiar with the fundamentals. When I was offered a scholarship to attend the class, I jumped on it as knowing our financial situation is (again) in transition, this is the perfect time to dig our heels in and get on our feet for once and for all.
Last Sunday was the first class. Today I received my membership kit. I’m a total budget nerd and so thankful to be able to go through an actual class.
Today, I sat my boys down and discussed budgeting and going through what are referred to as The 7 Baby Steps.
- Save up for a baby emergency fund ($500 based on my income…it’s usually $1000)
- Pay off all debt (except the mortgage) with the debt snowball.
- Put 3 – 6 months of expenses in savings (your fully funded emergency fund).
- Invest 15% of household income into Roth IRA’s and pretax retirement plans.
- Save for your children’s college education in tax favored plans.
- Pay off the mortgage early.
- Build wealth and give!
So we talked about how following these steps will open the doors to awesome things. How we will be able to save for things and not have to worry paying for things we want.
The boys seem to be on board to knock these steps out with enthusiasm. We have a pop bottle filled with coins and an orange juice bottle about a third full. My oldest boy immediately suggested using it to fund Step One.
My only debt is the parenting time expeditor (owing $267.55) and student loan.
We could be on Baby Step Three before the end of this class.
Then Baby Step Four just takes care of itself, all I have to do is sign the papers. Going to have to learn more about Baby Step Five…the college fund one. I’m not sure how much is supposed to go into that one. Will be so much fun to financially invest in their future.
We all went to the bank and cashed in our coins, we had $192.82 between those bottles and our dollar jar. We are well on our way to financial peace!
As I know I have a grant from trails to treatment coming, I decided to use this cash to finish funding all my envelopes.
- Gas/Maint: $175
- Medical/Dental: $16
- Utilities: $80
- Sports: $50
- Personal: $80
This way I am not trying to track debit card usage from my child support account, and trying to be able to put most of the child support towards Baby Step One. I am pretty sure that by the end of January we will be fairly close to finishing up Baby Step One.
Baby Step Two should be a cake walk, I owe just the parenting time expeditor under $300.
I know Baby Step Three will be a little more difficult and that is where I will be challenged. This is where the discipline part is going to be tough and rewarding at the same time.
Looking at saving up to $8000 seems insurmountable at this point in time. I think the boys and I will have to make some sort of visual chart to mark off how far we are getting. Even at $400/month (which is way out of our reach at this point in time) we’re looking at almost two years. Wow, that is a long time.
For right now, I need to focus on where we are, not where we are going. When I was sick, I focused only on the task at hand; getting to the next appointment, the next day, the next hour. For our current challenge, I will have to focus on the next paycheck, the next tax return, the next reward.
I’m not sure if Dave Ramsey allows for smaller goals with small rewards (a nice meal out, a getaway for the weekend, or other small rewards for meeting milestones) but think if the boys and I work in $1000 increments, it may be easier to stay on track.
We can make a chart that we fill in as we go (like a fundraising campaign thermometer) and make that a visual in our home. Knowing we have a common goal will make it much easier to understand the no’s and their implications.
As we learn to use Your money in a new way, help us to remain focussed and to come to You with our concerns and frustrations. I know discipline is difficult, and I also know the rewards of consistency are so worth the battle.
As the boys learn to use money as the tool it is meant to be, help me to mentor and lead them.
Father, I ask for help getting through these baby steps. Financial help, emotional help. While my heart keeps shouting, “The faster we get through this, the sooner we are done!” My brain knows that it is a marathon, not a sprint. I’ve done a marathon God…it was hard…and so worth it.
Help me to keep my eye on the end goal, to be able to live and give like no-one else. Shut out the sounds of the evil one’s claims that money equals dignity.
My trust is in You alone.