Have you ever read articles titled something like, “20 Things You Should Be Doing With Your Money”? I hate these articles. I use to come across these articles in the past, and all they did for me was overload me with a bunch of information. So much information that I never got any of the items done. That’s how I use to feel in regards to my finances until my dad introduced me to Dave Ramsey. I’m forever grateful for that introduction. As a young adult armed with the passion of my why I needed a plan and the knowledge to actually make my dreams a reality.
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This is where Dave Ramsey and his program come into play. His program is the complete opposite of those articles that I hate. What I love most about his program is that it’s broken down into seven baby steps, which can be found in his book, The Total Money Makeover. The steps are very easy to understand. You can determine where you are in the baby steps and move forward accordingly. He also gives great basic financial advice for someone who is not financially literate so they have a foundation to build on.
Continue reading to find out why and how Dave Ramsey, or Uncle Dave as I like to call him, has been such an impact for Kim and me.
Learning how to budget has been an awesome experience. The budget is one of the keys to getting your finances under control and making your money work for you. It gives you the ability to turn the passion of your why into something tangible. So often, before I knew how to do a zero-based budget, I would feel like my money would disappear. I especially felt this way at the beginning of the year when I received my W2. I always had a feeling of regret because I made so much money and had nothing to show for it. Today, that feeling is a distant memory since I started doing a zero-based budget in 2009. Once Kim and I got married in 2012 we started to do our budget together. We can account for every single penny of income that has come into this house since then.
By doing a zero-based budget, there’s a sense of control that nothing is impossible when it comes to money. That sense of control has spread to other parts of our life which have given us the confidence and courage to start our own blog to share these words with you. It’s so easy to get caught up in paying the bills that we forget to invest for our future or we overspend on things today. However, the budget has helped us find the perfect balance. Doing a zero-based budget every month (or pay period like us) is the key to directing YOUR dollars to YOUR dreams for the present AND future.
A Plan – A Framework To Operate In
Uncle Dave’s plan is the most straight forward to follow. There is no confusion about what you should be doing next. Other financial experts seem to overload you with random information, but Uncle Dave provides a framework to operate within. His plan consists of seven steps that will help you eliminate debt and tell you what to do once you are out of debt. Doing each baby step will ultimately get you to financial independence.
Some people might think I follow Dave Ramsey blindly, but I actually do my own research to find out what reasons he has for offering the advice he does. Through my own research, I have come to find that he offers sound advice. To get to the point, the source of the advice doesn’t matter as much as the quality of the advice itself. Do your due diligence when deciding to get on an experts plan or when creating your own.
Basic Financial Knowledge Base
For the past 2 years, I’ve been reading as much as I can. From finances to career improvement, etc. It’s become clear to me that what I don’t know can hurt me. This is why so many people get into financial problems.
Uncle Dave provided me with the basic information about doing a budget, why to do a budget, protecting my family with term life insurance and a will, and investing just to name a few. This knowledge is important to finances, but it isn’t the most important part.
Knowledge that doesn’t impact your behavior is useless.
Focus on Behavioral Change
The golden rule of personal finance is “live on less than you make.” This. Is. Hard. Sometimes it’s going to feel like you are losing ground to your peers. Family members and friends may not understand why you are doing this. It can get a little lonely at times, to be honest.
The baby steps have an underlying focus on behavior change that helps you cope. When you begin to see the results of sticking with those behavior changes you’ll realize it’s the only way to live. The goal is to get to your version of financial freedom. The only way to last through the long haul is to form new habits.
The Debt Free Screams
For those of you not familiar with Dave Ramsey I’ll explain. Not only does he have books such as the Total Money Makeover, he has a podcast as well. In each hour of his podcast, he invites someone who has recently become debt free (including or not including their home) to share their story. Some stories are funny and some are heartbreaking, but they are all motivating. After listening to his show for awhile I began to ask myself, “If they can do it then why the hell can’t I?” A lot of the time you’ll hear couples or even singles who have paid off their homes at ridiculously young ages – between 20 and 40 years old! Can you imagine not having a house payment?!
Before I found Uncle Dave and the debt free screams I didn’t think it was possible for someone to pay off their house before 40. I’ve realized that my whole view on what I can accomplish with money has changed. Being armed with the knowledge helped with the mental shift for me. What helped me even more is HEARING the stories of people around my age and at my income level winning with money!