In my last personal post I opened up the door about my finances and how I am working on being debt free by my 30th birthday (645 days and counting) Debt Free. Two words that rarely fit together in this day and age. Debt Free, yes… I am serious. And yes you can say those words too. How? Well if you are a Canadian Reader I’m about to introduce you to something you had no idea existed, and if you are interested in walking the walk and talking the talk then YOU MUST COMMIT 200%.
[ Finanical Peace Revisted + The Total Money Makeover ]
In the past, I’ve gotten fed up of my debt and tried to do things on my own. Clearly I failed on that front and always ended up indebting myself again. I considered seeing a financial planner at my current bank (so glad I didn’t go that route) but instead I decided to sign up to the online Financial Peace University courses. Why online? Because there are no seminars here in Canada and I needed more than just a book reading. I needed guidance and a motivational speaker. That my friends is the definition of Dave Ramsey. I mentioned him on twitter, my facebook updates and even on the blog… but if you are like me (4 months ago) I had no idea who this guy was.
Dave Ramsey is first and foremost a guy who’s been there. Who’s been in debt, who filed for bankruptcy and who got his life back on track. He speaks about his personal experience and what he’s learned along the way and teaches you, me and your neighbor how to live a debt free life. He is a best-seller author of The Total Money Makeover and host of Dave Ramsey’s Radio Show which can be heard online or throughout the US.
His approach to teaching you about your money is amazing. The life lessons, the baby steps to follow, how to control your finances… all of it is amazing. Is he reinventing the wheel? No. But seeing it through his words, his eyes is like seeing something completely new. It is a huge eye-opener. But like I’ve said you need to be fed-up of your debt enough to make sacrifices, to budget every penny you have and to be gazelle intense about working on the debt snowball. I’m sure you are saying “huh? Baby Steps, Debt Snowball, Gazelle?” Ya… I know it looks all so random but they actually fit more than you think.
- $1,000 to start an Emergency Fund
- Pay off all debt using the Debt Snowball
- 3 to 6 months of expenses in savings
- Invest 15% of household income into Roth IRAs and pre-tax retirement
- College funding for children
- Pay off home early
- Build wealth and give! Invest in mutual funds and real estate.
This is about attacking your debt with intensity (gazelle intensity) How it works? List your debts, excluding the house, in order or smallest balance to biggest. Don’t do the mistake of listing them using the higher interest rate. This method is about attacking the smallest debt first even if it’s its a little or no interest. Yes, I know you are saying “but why pay my 0% card first when I have one at 20%?” Trust me. What you’ve been doing in the past hasn’t been working… so why not try something new ;]
The debt snowball is simple concept: You need some quick wins in order to stay pumped up about getting out of debt! Paying off debt is not always about math. It’s about motivation. How awesome does it feel when you’ve paid of 1 of you debts. You get pumped, start attacking debt #2 and in no time you will be done. When you start knocking off the easier debts, you will see results and you will stay motivated to dump your debt.
Those are the 2 main things you need to worry about now. Step 1 & 2 of the baby steps. If you want to get your finances in tuned and want to live the debt free life, I promise it is possible. But not if you do it alone. If you don’t want to commit to the FPU classes (which are 100$ US but come with the Finanical Peace Revisted Book) Then I suggest you purchase The Total Money Makeover book. You can also listen to his free podcasts (which are 40 mins of his 3 hours show) or even try to listen online.
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I will talk about how to get rid of debt fast. Yup that means taking extreme measures because you are in an extreme debt free mode state. I will give you some tricks too. I am saving over 175$ a month on bills. YES 175$ a month. Seriously… what is up with that!!! Not to worry, I will give you the details shortly…
[ on a side note : I have no background in finance and everything I am blogging about in this series of posts is from personal experience and my determination to help others life the debt free life. Please note that the product(s) in the post above are linked to Amazon via my Amazon Associates account. This allows me to receive a small percentage of the item's sale price if anyone chooses to purchase an item after clicking on the link. Please understand I have not been compensated to write about this/these product(S). I do because they are fab! ]