There are many things I have accomplished in my life of which I am proud. I am proud of my children, my spouse and of course – my website! Another thing of which I am so very proud was that in less than 3 years, my husband and I were able to eliminate more than $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. It feels incredible!!
Unfortunately, like so many Americans, were were never as savvy with our finances as we could be. We had a lot of debt and oftentimes found ourselves living from paycheck to paycheck. And yes, quite frequently we would find ourselves “Robbing Peter to pay Paul.” In November 2007, however, that all changed. We read Dave Ramsey’s Total Money Makeover. While it may seem rather cliche, it was absolutely life changing for us. For the first time in both of our adult lives, our financial life was more secure. Not only that, my husband and I have grown closer and our marriage is stronger as a result.
If you find yourself wandering down the same path of financial mayhem and are ready to commit to making a change, then you will want to join us for another year of our Debt Free / Savings Challenge! During 2011 Penny Pinchin’ Mom readers were able to eliminate more than $340,000 in debt! I would LOVE to top that figure this year!!!!
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 4 years after we first read his book. We are not the only one who believe in what Dave Ramsey teaches.
LET’S GET STARTED!!!!
Are you ready? Because there is no time like right not to get started on working your way out of debt. Of course, we can’t just jump in and start to pay off those bills. There are some steps you should take in order to get a true picture of your finances. Trust me when I say that I KNOW this will be difficult. However, you will need to to this in order to fully commit to the challenge.
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 – even though it says 2011 – the forms still will work).
There is one other form that you will need to complete as well. This is called the Debt Snowball. 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 – what if you are already out of debt, does that mean this challenge doesn’t apply to you? The challenge can still work for you too - but just in a little different way. I challenge you to create a fully funded Emergency Fund – -which should be at least 6 months of your household income. Those steps will come soon enough — but you should still create your Net Worth Form so you can be ready when we start to discuss how this challenge can even help you!
That’s it!! Your very first Debt Free Challenge Assignment!! The next lesson will be in one week – so you have that long in order to get it done. You’re already on the right path to getting started living a debt free life! Congratulations and pat yourself on the back!!!
If you would like to add this to your Google Calendar (which you can then sync with Outlook if you use that application), just click the image below so that you don’t forget!
Tracie is a stay at home mom to three young children; ages 4, 6 and 8 in Raymore, Missouri. In November 2007, she and her husband decided to eliminate their debt and made many changes in their lifestyle to do just that.
In 27 months, they eradicated over $37,000 in debt through both budgeting and learning how to live a frugal life. She now shares her knowledge in order to help you stretch your hard-earned dollars so you can live the life you want.