One of the reasons I started my blog back in April was to chronicle our family’s journey to become completely (and eternally) debt free! I haven’t updated you all since May but lots of exciting things have happened since then.
Since my last update, Lee & I have (finally!) started Financial Peace University at a local church. I’m so excited that he’s going with me because I’ve been the driving force behind our family getting out of debt. I can already tell a HUGE difference in our finances just in the few weeks we’ve been taking the class because we are FINALLY on the same page! We do the budget together, we pay off debt together, we fix problems together, and we celebrate together!!
I would HIGHLY recommend taking FPU if you want to learn how to get a handle on your family’s finances.
1. Credit Cards — $5000 2. Personal Loans — $6000
3. Student Loan (Molly) — $5937
4. Auto Loan — $13,282
1. Credit Cards — $5000 2. Personal Loan — $6000
3. Personal Loan — $2000*
4. Student Loan (Molly) — $5812
5. Auto Loan — $12,675
1. Credit Cards — $5000 2. Personal Loan –$6000 3. Personal Loan — $2400 4. Camera — $250*
5. Student Loan (Molly) — $5797
6. Auto Loan — $11,441
*We had a no-interest charge on our WalMart Credit Card from where we bought our digital camera when Aymen Grace was born. We decided that cutting up that card & canceling the account was more important than not paying interest so we went ahead and paid it off.
As you can see, we are back down to ONLY TWO DEBTS! Lee has some real estate investments left over from when his father passed away. Those investments lost a lot of money when the real estate market crashed & Lee decided to sell what he could right now (not much, about $3900) and we used that to finish Baby Step #1 and pay off Debt #3 from the above list.
Here are Dave Ramsey’s Baby FPU Baby Steps:
1. $1000 Emergency Fund
2. Debt Snowball
3. Fully Funded Emergency Fund (3-6 months worth of expenses)
4. 15% of Income into Retirement**
5. College Fund**
6. Pay Off House Early**
7. Build Wealth & Give
**Baby Steps 4, 5, & 6 happen simultaneously.
The idea is to get a strong hold of your finances, get out of debt, and build wealth so you can create a legacy for your family and be generous with your giving. This will require some sacrifice and you’ll probably be called ‘weird’ for not using credit cards & saying ‘no’ when you can’t afford something but if you live like no one else now, later you will be able to live like no one else! Our biggest sacrifice so far has been going out to eat. We were spending a few hundred dollars each month at restaurants & now we spend $50 or less each month.
We’ve completed Baby Step 1 and we’re working on our Debt Snowball right now! We’ve started to plan what we’re going to do when we have NO PAYMENTS to make each month. Some of those dreams include: buying all organic food at the grocery store, remodeling our kitchen & bathroom, saving up to put an addition on our home, going out to eat just so we can leave generous tips for the waitresses, increasing our tithe percentage, choosing awesome charities to give generously to, and so much more. It’s so fun to plan these things with my husband by my side. We can actually see a great financial future for our family.
So tell me, have you been through FPU before?
If not, do you have a budget that your family sticks to each month?