As I had mentioned in an earlier post, we have decided to work hard to become completely debt free. We are following the advise of Dave Ramsey, author of The Total Money Makeover. Dave has a clear cut method to staying focused and working through each step before you proceed onto the next. His steps are as follows:
- Baby Step 1 – Save $1,000 FAST! (small emergency fund)
- Baby Step 2 – Debt Snowball.
- Baby Step 3 – Build your Fully Funded Emergency Fund.
- Baby Step 4 – Save 15% Of Income For Retirement.
- Baby Step 5 – Save For College.
- Baby Step 6 – PAY OFF Mortgage!
- Baby Step 7 – Build Wealth And Give!
I’m happy to report that we have completed Baby Step 1 and are onto Baby Step 2 after only 1 month. Our debt has been reduced by 2%. Now that doesn’t seem like a lot but remember we were also gathering up our $1000 small emergency fund and then working on the debt snowball all in 30 days. And the really good thing is, our debt did not go up, it went down!
We will have to make 1 adjustment to the 7 Baby Steps. Step 5: Save For College. You see we are right in the middle of sending our kids to college so we are a bit very behind. Our save for college becomes part of our Debt Snowball. But you know what, it’s never too late to start.
So after July I’d say I’m pretty happy with our progress. Saved our emergency fund & cut down 2% of our debt. Not a bad way to start.
Note: I am starting a monthly post soon on how to cut expenses in your budget. I’m getting pretty good at it since I spent the month going over my budget with a fine tooth comb. If you have any suggestions or have cut your own expenses in any way (even small cuts are great) post a comment or send me an email so I can add it to the post.
My first way to cut expenses: I bought an insert for my Keurig coffee machine so I can use regular coffee instead of buying K-cups. Saving per year (including purchasing the insert) $128. That’s $10 per month.
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you inspire me. Thank you for posting all of your hard work. I have recently reduce my grocery bill from around $170.00 to under $130.00. I would love to cut another $20.00 but one thing at a time. Unfortunate thing I am never very successful with coupons. Many of the things I buy do not have coupons such as Kefir. I also do not buy a lot of canned or boxed goods other than beans, tomatoes, soup, cereal. Anyway….. Thank you.
I found your website completely by accident. I can’t tell you how much it encouraged me. My husband and I are also trying to become debt free. It’s such a hard thing to do now that we have so many years of accumulated debt to fix. Thank you for sharing your progress with us. It really encourages those of us struggling to reach the same goal.