How Dave Ramsey Helped our Family
I have been meaning to make a post about Dave Ramsey for quite some time, as he helped our family get out of the rut we were stuck in, making no progress financially.
A couple of years ago, my husband and I started noticing that we were starting to have overdrafts in our bank frequently (those are so embarrassing!), and if we ever had any money by the time the next paycheck came, it was about 10-20 dollars. That was it. Have you ever been there? It's not fun- not at all!
We never had any extra money for anything, and we were never 'getting ahead' at all.
We were getting extremely frustrated with this..and it was really hard on us when something unexpected would happen- like a hospital bill would come in the mail, or our transmission in the car would go out...or even when gas prices would go up.
Trying to come up with money for things like this was near impossible.
Finally, we got fed up with it. By chance, we started listening to a radio program that came on in the mornings. Dave Ramsey, who talked about money and how to overcome your financial problems.
So many things he said made sense. At first though, we listened and thought, "oh yeah, sure, that would be great, but there's no way we could afford to on our living." but we didn't act upon his advice.
Months passed and we finally decided to buy the book, "The Total Money Makeover" by Dave Ramsey.
James and I actually read the book outloud to each other. It was so interesting and we actually were very excited to start working with the principles stated in the book. We were extremely motivated by the words Dave Ramsey used....Dave does not walk on eggshells. He tells you where you're going wrong, where you're being stupid, and how to fix it!
The plan to financial success, according to the book, is to use baby steps. Here are the baby steps listed, to bring financial freedom:
Here is what happened:
The first month, we sorted out all of our paycheck into different envelopes. One envelope was for the electric bill, one was for the water bill, one was for groceries, one was for gas, and so on.
I did not spend ANYTHING over the amounts in those envelopes. I paid for groceries in CASH.
We started writing out our grocery list so that we were only spending about 150.00 every 2 weeks for groceries. This is when I was pregnant with Noah, so I had two children and one in the oven at the time.
We did NOT eat out.
We did NOT buy new clothes.
We did NOT buy junk food at the grocery store.
We did disconnect our long distance service on the phone.
We did change our insurance policies to make them more affordable.
We did sell many of our belongings to make money.
We did reduce our grocery bill to about $150.00 every 2 weeks, sometimes only $100.00 was necessary if we were very careful.
We did NOT impulse buy.
We made many changes like this and saving money became a goal that we actually felt was possible after all!
In fact, we got so encouraged after we made the first thousand, that we started going to garage sales and reselling things that we bought there. The first month we did that, we made a total of $2,000, $1,000 of which was profit. After we raised that money, our transmission in the car went out.
We had the money to pay for it....without having to be worried, stressed out, or anything! It was such a nice feeling!! We paid in full, right away.
We were able to raise our entire 8 months of living expenses in just 8 months. I thought for sure it would take longer than that, because it just didn't seem possible that we could make that much in such a short amount of time. It just goes to show that where there's a will, there's a way.'
Dave Ramsey's book really got us fired up! We didn't have any motivation to save the money until after reading his book. I would strongly recommend that you buy it if you haven't already.
Dave's motto is, Live like no one else, so that later, you can live like no one else!
You can read the rest of Dave Ramsey's baby steps to financial success in the book,The Total Money Makeover , and you can also watch his show every night on the Fox business channel (I believe it starts at 7:00 central though I could be wrong).
Any other information that you'd like to know about Dave Ramsey, you can get at his website, Daveramsey.com .
Here is a video that I think is relevant.... this video cracks me up every time I watch it! It's called "Don't Buy Stuff you Can't Afford."
It's hilarious, but actually holds a lot of truth!
(Note: You'll have to click the picture below to get to a page that shows the video. I couldn't embed it here unfortunately!)
A couple of years ago, my husband and I started noticing that we were starting to have overdrafts in our bank frequently (those are so embarrassing!), and if we ever had any money by the time the next paycheck came, it was about 10-20 dollars. That was it. Have you ever been there? It's not fun- not at all!
We never had any extra money for anything, and we were never 'getting ahead' at all.
We were getting extremely frustrated with this..and it was really hard on us when something unexpected would happen- like a hospital bill would come in the mail, or our transmission in the car would go out...or even when gas prices would go up.
Trying to come up with money for things like this was near impossible.
Finally, we got fed up with it. By chance, we started listening to a radio program that came on in the mornings. Dave Ramsey, who talked about money and how to overcome your financial problems.
So many things he said made sense. At first though, we listened and thought, "oh yeah, sure, that would be great, but there's no way we could afford to on our living." but we didn't act upon his advice.
Months passed and we finally decided to buy the book, "The Total Money Makeover" by Dave Ramsey.
James and I actually read the book outloud to each other. It was so interesting and we actually were very excited to start working with the principles stated in the book. We were extremely motivated by the words Dave Ramsey used....Dave does not walk on eggshells. He tells you where you're going wrong, where you're being stupid, and how to fix it!
The plan to financial success, according to the book, is to use baby steps. Here are the baby steps listed, to bring financial freedom:
- Step 1: Start an emergency fund. The fund should be 1,000 dollars. This will be there for you if something unexpected happens while you're trying to save money, that way you'll be prepared.
- Step 2: The second thing that he says to do is to pay off all of your debt, starting with the smallest amounts first (the reasoning for this is that when you pay off each of the smaller debts, you will feel motivated and relieved when each is paid off. If you start with the bigger ones you may burn out before you feel that relief.)
- Step 3: The third step is to save 3-6 months of living expenses. We decided to go further with that. We decided to set our goal for 6-8 months of living expenses. This was a large sum and I thought for sure we would not be able to do it on the amount of money we make. James assured me it was possible.
Here is what happened:
The first month, we sorted out all of our paycheck into different envelopes. One envelope was for the electric bill, one was for the water bill, one was for groceries, one was for gas, and so on.
I did not spend ANYTHING over the amounts in those envelopes. I paid for groceries in CASH.
We started writing out our grocery list so that we were only spending about 150.00 every 2 weeks for groceries. This is when I was pregnant with Noah, so I had two children and one in the oven at the time.
We did NOT eat out.
We did NOT buy new clothes.
We did NOT buy junk food at the grocery store.
We did disconnect our long distance service on the phone.
We did change our insurance policies to make them more affordable.
We did sell many of our belongings to make money.
We did reduce our grocery bill to about $150.00 every 2 weeks, sometimes only $100.00 was necessary if we were very careful.
We did NOT impulse buy.
We made many changes like this and saving money became a goal that we actually felt was possible after all!
In fact, we got so encouraged after we made the first thousand, that we started going to garage sales and reselling things that we bought there. The first month we did that, we made a total of $2,000, $1,000 of which was profit. After we raised that money, our transmission in the car went out.
We had the money to pay for it....without having to be worried, stressed out, or anything! It was such a nice feeling!! We paid in full, right away.
We were able to raise our entire 8 months of living expenses in just 8 months. I thought for sure it would take longer than that, because it just didn't seem possible that we could make that much in such a short amount of time. It just goes to show that where there's a will, there's a way.'
Dave Ramsey's book really got us fired up! We didn't have any motivation to save the money until after reading his book. I would strongly recommend that you buy it if you haven't already.
Dave's motto is, Live like no one else, so that later, you can live like no one else!
You can read the rest of Dave Ramsey's baby steps to financial success in the book,The Total Money Makeover , and you can also watch his show every night on the Fox business channel (I believe it starts at 7:00 central though I could be wrong).
Any other information that you'd like to know about Dave Ramsey, you can get at his website, Daveramsey.com .
Here is a video that I think is relevant.... this video cracks me up every time I watch it! It's called "Don't Buy Stuff you Can't Afford."
It's hilarious, but actually holds a lot of truth!
(Note: You'll have to click the picture below to get to a page that shows the video. I couldn't embed it here unfortunately!)
Living in college I definitly see how the little things add up. You can save so much money just by packing a little picnic and going for a little hike on a Saturday saves so much more money then say dinner and a movie. Instead of blowing like $200 at an amusement park go to the beach with a bunch of friends for the day and make kites and fly them, collect seashells and paint them, build a sand castle. The best things in life are free : )
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That is so true, Jess!
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My husband and I also follow many of Dave Ramsey's Total Money Makeover priciples.
It was a bit difficult at first since my husband is an independent contractor and his income varies from week to week, but once we got that out of the way it has been great.
We will pay off our auto loan in a June and we will finally be debt free except for our home.
I am so excited about the next step in the process, which for us is to use half of our old auto loan to fund our retirement and the other half will be included as an extra payments on our mortgage.
Dave is the real deal.
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I have heard Dave speak to people in that situation before...I know he had some very specific advice for those with an unsteady income. I can't remember what it was but I'm sure if you follow his principles you've found the way!
Congratulations on being so close to being debt free!!!
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My husband read the book he got as a Christmas gift (one he requested). Then I read it. It is so exciting to tell your money where to go each month. I love it! I would definitely recommend it to anyone.
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Great Christmas gift for your husband to request and receive!!
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Bethany,
That is amazing that you saved so much money. Did you sell garage sale items on ebay? Now I want to know. :o)
My husband and I just started 13 wks of Financial Peace University. Dave Ramsey is great!
Thank you for sharing and being an inspriation.
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Yes, we sure did! We bought different random items at garage sales, and listed them on Ebay, one by one. It took so much time out of my day, but I was in the "gazelle intensity" mode! lol
I did eventually stop though because the house was getting cluttered with the stuff that *didn't* sell, and I was exhausted from all the listing and packing items!
But it worked for a while!
Congratulations on getting started in Financial peace...I have heard it is awesome!
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It really does take a lot of energy to sell items on Ebay (especially with little ones). Those trips to the post office, etc. That is great though. How did you know what to buy? What would sell to make it worth it? Small items?
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Very cool to read something positive about Dave!
We have been debt free 100% for a while, with savings and it is soooo freeing. Of course, it still hurts to have to pay several hundred for car fixing, but at least we know that we will not be paying more to the credit company if we had to borrow that money.
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Good for you!!!
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We follow the Ramsey plan too and it has really changed everything for us. We are so much better off because of his plan. We took FPU and it was wonderful. I would recommend it to anyone who is ready for a change in their finances or who is looking to get ahead.
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I've been implementing Dave's strategies little by little into our monthly plans. We are not to the point of "gazelle intensity", which we probably should be. It is amazing though how much we have paid off and the fact that we actually have some savings is beyond me some days. We have less than $10,000 in debt now (besides the house) and I'm hoping to have the last of the debt paid off by the end of the year! Woo-hoo!
Congratulations to you on your Financial Peace!
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I have Dave's book too and managed to save the 6 months' money without having a "budget" as such - mainly from tax returns. But I am seeing that we are still overspending (when we can't pay our credit card off in full each month) even though we don't have any debts other than our house. But I just HATE budgets! and the envelope thing makes me shudder! Any suggestions?
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"Painting is by nature a luminous language." - Robert Delaunay / http://airbrushactioncom/airbrush-getaway-workshops/vegas-february-20-24-2012
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