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

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.)