ONE STEP AT A TIME

After college, I ran into chaos financially due to massive disorganization. I was on the search for a solution. That's when I discovered Dave Ramsey's book The Total Money Makeover. I couldn't put the book down until I finished reading it. This book changed my life and outlook on money completely. Within the book many people shared their paths to financial freedom, which was greatly motivating. Reading that someone had the ability to eliminate $76k of debt in 3 yrs was what I needed to make a change. I didn't pay much attention to the amount of time it took, only the fact that the goal was feasible. As a result, my wife and I are on this same mission today. Our plan is to eliminate our debt as quick as we can for our future and our children's future. Dave Ramsey makes this easy with a basic 7 step process called the Baby Steps:

1. Baby Emergency Fund: Save $1000 as quick as possible. This is to be used for emergencies ONLY. If you withdraw from it, build it back immediately. (Only withdraw for "God Only Knows" emergencies such as: Car repair, damaged roof, cracked windshield, etc.)

2. Debt Destruction: Eliminate ALL debt, except a home if you have one already. This is the TOUGHEST part of the journey and will take some intense changes in behavior. Every dollar remaining after monthly expenses is to be used to eliminate debt. No new cars, homes, expensive purchases, no saving, no investments, NOTHING! (I'm sure many thoughts of "whatever, I'll pass" are happening at this moment, but trust me it's rewarding!)

3. Increase Emergency Fund: After your debt is gone, you'll increase your "Baby Emergency Fund" from $1,000 to 3-6 months worth of your monthly living expenses. For example, if your monthly living expenses are $1,000 that means you'll build it to $3000-6000. As stated in step one, this will ONLY be used for EMERGENCIES. If used, work towards rebuilding it as quick as possible.

4. Investment Time: Allocate 15% of YOUR salary to retirement/investments. If you're getting a match or contributions from your respective careers/companies, that IS NOT to be a part of YOUR 15% total. The extra contributions from the company will be 'icing on the cake'.

5. Children's Education Funding: Start saving for your child's education using a traditional college fund, such as an Education Savings Account (ESA) or a 529 College Savings Plan.

6. Mortgage: Allocate every dollar remaining after the previous steps towards extra mortgage payments to eliminate it as quick as possible.

7. Continue to Build Wealth and Give: At this point, you'll have no debt including your home mortgage and you'll understand what true wealth means. You'll also have the luxury of limitless giving to people and causes you care about.

This is intimidating, I know, but it can be done. It will take sacrifice and denying instant gratification. Dave describes it as "living like no one else now so that later you can live and give like no one else". All of this work is done in unison with a monthly budget. That budget will be key to your financial organization and eliminating your debt. After your debt is eliminated, a budget will show you how much money you have remaining for investments, saving for a home, vacations, travel, etc. When you have no debt, life feels so free, rewarding and prosperous.

These steps are a only a foundation. Some people follow it exactly and, like us, others add their own twist to the process. The important part is to have a foundation as a working platform.

COMMUNITY INFECTION

You would think that wanting to accomplish this goal would be a great thing. However, there seems to be a generational curse among historically poor communities that creates a discouraging atmosphere. Many believe that climbing a mountain of debt to become wealthy is IMPOSSIBLE. As a result, when we decide to make a plan to be successful in the area of debt elimination, it becomes a stage for hecklers. I'll tell you today, that MY FAMILY WILL NOT become victim to this curse or affected by the hecklers and non believers. As my mother would say, I'll show you better than I can tell you. The "crabs in a barrel" mentality will not include me and my family. We're on a journey to be debt free and create generational wealth. Join us!