Debt Free / Savings Challenge 2011 – Let’s Get Started!

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I love facts and statistics.  Here are two that I find very interesting:

  • Average American credit card debt: $15,788
  • Total U.S. Revolving Debt (as of March 2010): $852.6 billion
  • Total U.S. Consumer Debt (as of June 2010): $2.42 trillion
    (source: CreditCards.com)

Our family use to be included in the top two statistics.   In less than 3 years, we eliminated over $37,000 in debt (both revolving and fixed) and fully funded our emergency fund (meaning at least 6 months of income).  We are now working on building retirement and college savings accounts and working on reducing our mortgage.   

Of course, we weren’t always this savvy with our money.  We had debts, lived paycheck to paycheck and sometimes even had to “Rob Peter to pay Paul.”  We turned our financial life around starting in November 2007 by following Dave Ramsey’s Total Money Makeover.   It truly was life changing and as a result, not only is our financial life more secure, my husband and I have grown closer and our marriage is stronger as a result.

If you find you are in the same situation and want to make a change to your family’s financial picture, I’ve got great news for you!  Today begins the first Debt Free / Savings Challenge!  During 2011 we are going to help all of you work towards getting more control on your finances, reducing and/or eliminating debt and even increasing your savings so you are ready when the unexpected comes along (and trust me – it will happen). 

As I mentioned above, my family followed (and still does follow) Dave Ramsey.  The tools and skills we learned from him continue to influence the way we look at money — even 3 years after we first read his book.  We are not the only one who believe in what Dave Ramsey teaches.  CommunityAmerica Credit Union also is a strong believer in living a debt free lifestyle.  They are actually getting ready to help local families with one-on-one counseling and assistance to strive to become more financially independent.

Even more exciting that CommunityAmerica Credit Union helps families is that they actually ended up selecting one of Penny Pinchin’ Moms readers to get the Family Financial Makeover during 2011!!  I am so excited for you!!    During this year, we will be able to learn money saving tips and tricks that they are learning through their sessions.  Not only will you have a peer going through this entire process along side of you, CommunityAmerica Credit Union has also graciously offered all of their Financial Makeover forms to be used at Penny Pinchin’ Moms readers disposal!  Thank you CommunityAmerica!

LET’S GET STARTED!!!!

Let’s not waste another moment living a financially-stressed life.  There is no time like the present to get going on working your way OUT of debt.  The first thing you need to see is what your financial picture actually looks like.  I know that this assignment will be a difficult one, but you can’t fully commit to the challenge until you can accomplish this step. 

The first form you will need to complete is your Net Worth.  This will provide you with an overview of your assets and liabilities and gives you an overall picture of what you ….well….are worth (financially only, of course).  I am sure that many of you will be in the red – or have a negative net worth.  That’s OK.  This is part of the journey to financial independence.  Head HERE and download the top form called: Net Worth Statement (you can print via pdf or download into excel and complete).

I am going to also have you complete one more form – Debt Snowball Form.  This one should be simple as it will stem from the liabilities you will record on your Net Worth worksheet.  You will need to list all of your debts from the lowest outstanding balance at the top down to the one to whom you owe the most (do not include your mortgate company within this list).  Contrary to what you may have heard with other programs, we are not going to look at the interest rate.  

So – there you have it – your first official DEBT FREE ASSIGNMENT!!  You’ll have a week to get this done before we introduce our next step, which will be about setting up your budget.   You’re already on the right path to getting started living a debt free life!  Congratulations and pat yourself on the back!!!

(I am not a financial advisor and the information listed within these Debt Challenge posts is not to be construed a financial advice.   This is knowledge we gained through our own personal experiences and information as outlined in Dave Ramsey’s Financial Makeover — and is being shared as such.  Participants are not required to follow any steps listed if they do not wish to do so. Financial concerns/issues should be addressed with a professional in order to receive advice and assistance.)

Tip! If you want to learn how to get out of debt, you can follow our Debt Free Living Series! more!!

Comments

  1. Thank you for being such a great support!
    I’m not going to lie getting “Financially Fit” is very scary to me BUT I’m up for the challenge!

    Thanks Again!

  2. Thanks so much! I’m going to sit down with my husband tonight and do this! We definitely need to get our finances in check if we want to build our house in a few months. One good thing going for us is we have zero in credit card debt since we got rid of all of our credit cards a couple of years ago.

    • You’ve already got half of the battle concquered with no cc debt – way to go! We are going to also help people who don’t have debt work on increasing savings as well – so something for everyone!

  3. Awesome challenge! I’ll be playing along at home!

  4. I am a 3 month “newbie” to couponing…and am really looking forward to learning all I can about saving money and becoming financially free!! My husband and I opened a small business 4 1/2 years ago and if we knew what was going to happen to economy we would have kept our jobs and not risked our savings on a new business venture. In the meantime, we even increased our family size by one (a new baby) and WHEW…it’s been a tough struggle, but 4 years later our business is doing ok, and we are still able to put food on the table and keep a roof over our heads. Also, I am able to stay at home, take care of the kids and run our business. I am just looking forward to be able to grow the saving back to where it was so it will be a little more stress-free in our lives. Thanks for all you do to help!!

    • I sure hope that we can help! Financial knowledge is one of the best gifts we can pass along to our children.

  5. This is a wonderful idea!!! We too found Dave Ramsey years back and have been hugely blessed by following his advice! It’s amazing what doors God will open for you when you live according to his word and when you are not so stressed about money to be able to hear him :)

  6. Crystal N says:

    I am excited to put this challenge to the test for my family!

  7. I’m very excited to sit down with my husband tonight and get this assignment completed! We’ve talked a lot over the last couple of weeks and we are both 100% committed to getting out of debt and not having to stress over money constantly!! Thanks so much for providing this information and support for your loyal readers!!

  8. I am up for the challenge. Our New Years Resolution is to pay off our credit cards and NEVER use them again! Thanks for doing this.

  9. sure do wish I was average….

  10. I am really, really, really excited to do this for myself. However, I am on my own, as my husband isn’t very motivated. That part is frustrating, but maybe if I can get my small credit card and my car paid off quickly, he’ll see my point and come around. One can hope!

  11. Teacher! Teacher! I’m ready for the next step. I did all my homework. I don’t like my networth statement but at least I know now!

    • LOL!! Good for you!

      • Will you be posting next steps every monday? Or how are you approaching this? We ran into a slight problem this pay period. We put exactly what we needed into the bank for bills and we were left with $0 for food/gas/fun till the next paycheck. I’ve cut out everything I can. Just don’t see how I can save/pay off stuff when the money isn’t there. :(

        • Yes – we are going to have a new post each Monday — to allow everyone a week to get each step completed. I have been in your shoe myself….and it isn’t fun. We’ll work on tips and ways to help out when you run into this situation.

  12. Angie Benz says:

    Thank you, Tracie for opening my eyes to living debt free. We have a family with three kiddos. Two of them are in school and they are busy with sports and music. Our youngest one is busy with dance. My husband earns a great income and I would love to be able to stay at home. We live in a rural area and my kids go to school 15 miles (one way) south of our farm and my husband and I work 40 miles (one way) northwest of our farm. I am hoping that this system will be the answer to my prayers! I have always had a bad relationship with money and I am excited and scared to hit it face on!

    OK…I have completed the first assignment, but I am unable to get to the Debt Snowball form. Any suggestions?

    Again, my family thanks you, Tracie! You are an inspiration!

    Angie

  13. Thank you for this! We’re looking forward to starting our new debt free adventure! One thing we did today was went to our bank to ask them what they could do about our auto loan and small credit card. They refinanced both into one loan at a lower rate, no fees, and the end result is we’ll have them paid off in less time and save $200 a month! Never hurts to ask!

  14. I have a question as i am trying to catch up to Week 3- On the net worth statement When it states cash value of real estate is this only if you own the home outright? We rent a house that still has a mortgage so how would be put this into the form? As well as what about clothing and jewelry do we put a price on the things in our house that we own such as those things and estimate about what they are worth?