How To Rock Your Finances (Part 1)
"He who loves pleasure will be a poor man. He who loves oil & wine will not be rich." Proverbs 21:17
We're officially one month into 2018. How are your resolutions holding up? Have you joined a gym? Read a book? Taken a good hard look at your finances? Today, I'm focusing on the latter. I want to talk about $$MONEY$$.
Don't worry, there's no judgment - just tips, tricks, and encouragement from my own financial journey.
About 18 months ago, I took part in Dave Ramsey's Financial Peace University. I've taken the course more than once, but I still learn something new each time. Not only has it taught me about how to have a healthy relationship with money, it's taught me how to make my money work for me, instead of me working for my money.
I've got a lofty goal of becoming debt free in 2018 (except for my mortgage) but with a clear plan of action, a whole lot of discipline, and having good people holding me accountable, I am pretty sure that this goal is within reason. If you have never made a budget, this month, I encourage you to make one. If you've never set financial goals, think about where you want to be 5,10, 20 years down the road. If you don't know where to start, that's ok! The first step is always the hardest, but once you take it, you'll never look back.
"In their hearts humans plan their course, but the LORD establishes their steps." Proverbs 16:9
No one ever taught me how to really manage my money. Years ago, my dad had told me to save 20% of my income - so I did!
This was great advice, as it helped my buy a house, and when I hit a rough patch in my career, I had a good chunk of change put aside to hold me over until I got a new job. But I knew there had to be more.
There had to be a system I could follow so I could build wealth. I had done a lot of things backwards - I was investing money, but still had debt. I bought a car, a house, and had student loan payments that I was barely chipping away at. I had money, but I wasn't necessarily accumulating wealth, and I wasn't actively planning for my future. I like to do things my way, but I've learned over the years, that my way isn't always the best way.
So I figured, if I actually wanted to build wealth, I should look to people who already have money - that's how I stumbled upon Financial Peace University. Dave Ramsey is worth a LOT of money - probably more than I will ever be worth, but he's done a great job breaking down how to get out of debt, how to set yourself up for when life comes at you hard, and how to invest and build wealth.
Currently, I'm on Step 2. Everyone's got to start somewhere! And I had a few things already in the works before beginning the program. I already had a 401K, some additional investments, a rental property, and more than $1,000 in my emergency fund. I kept all of those things in place - but now I'm super focused on getting rid of my debt.
I won't lie - it's not a lot of fun. I'd much rather spend my money on experiences, fine dining, charitable causes, and investments... but once I'm debt free, I know I'll be able to do all of those things - and more.
Step 2 is the hardest step, and probably the most painful one, too. You have to sit down and add up all of your debt. Yuck. Nobody wants to do that. But until you can establish where you are, you'll never be able to determine where need to be. I'll share my debt number later on in this series, but don't be too hard on yourself. Understand that most people haven't been taught how to manage their money (myself included) and that it's better to start late than never.
Do you have a get out of debt plan? Are you debt free? How did you do it?