Monday, August 4, 2014

Not A Twelve Step Program...

Dave Ramseys Total Money Makeover isn't a 12 step program to financial freedom...there's actually only seven steps involved.

The most important thing to remember if you take on The Total Money Makeover is to do the steps in order. No skipping ahead to a step that sounds more up your alley. If you skip a step you won't be helping yourself to get out of debt and most importantly STAY out of debt once there.

You need to remind yourself that the aim is to not only pay off the debt you have but to never get any debt again....EVER!

If you are committed to being debt free, are Gazelle intense about paying it all off and never being in that position again then sticking to the steps is what's going to get you there.

Before we get started one point that isn't an official step but is important is cutting up your credit cards. Don't wait until they are paid off do it NOW!

You need to look yourself in the eye and declare "I will never borrow again!" If you are committed to getting debt free you've basically done this so now is the time to test your resolve. Pick up a pair of scissors and pull your credit card out from it's snug little bed in your purse. Don't hesitate, snip it to pieces and smile like a mad man while you do. Today is your first day on the road to being debt free.

Now comes the official step one, prepare yourself because it may cause you some pain. Though if you're committed it won't really seem painful if you're thinking of what it's leading too.

Step one is 'Save $1000 as fast as you can'

The painful bit comes in to effect if you truly don't see anywhere else in your budget to pull money from.
Pay minimum monthly repayments, live on beans on toast, stop smoking, quit buying soda...any little extras you can cut to get a few more dollars from your budget cut out now.
If you have done this and $1000 is still far from happening sell something! Keep family heirlooms sell the rest!

You've committed to never borrowing again so you need money, cash, set aside in an emergency fund because we know Murphy likes to screw with us when we are at our lowest. This $1000 will be what you use when the electricity bill is higher than normal, when you blow a tire or the kids basketball goes through a window. You use the cash in emergencies only, it's not to be touched for gifts of ANY kind.

In case you missed it the painful bit about this step was selling your possessions. If you find this too difficult then you're not committed to being debt free and should give up now. Without full Gazelle intensity you'll never make it. If you have cut out as much as you can from your monthly spending and still can't find enough to meet the $1000 emergency fund then you need to get a second job or sell something you own.

You can't move on to step two until you've completed step one and you really want to get to step two, it's where all the fun starts.

Sell the Xbox, have a garage sale, take the treadmill to cash converters. Do what you need to to build up that $1000 as fast as possible. Don't dawdle on it. You want to meet this goal so you feel a sense of accomplishment. Once you've completed step one you'll be energised to get into step two.

As you go through the steps chances are you'll need that emergency fund for something - remember gifts are not emergencies - so each time you use your emergency fund you stop the step you are on and go back to step one until your emergency fund is once against at $1000.

Don't forget what I said in my last post, ANYONE can do this plan but ONLY if you are committed. It doesn't matter what your income is if you are committed and willing to sell sports equipment, video games, old clothes, DVDs etc... or get a second job, YOU CAN GET STARTED ON THIS JOURNEY. The only person holding you back is you!

Next post I'll get into step two, this is the one that gets us where we want to be, and I'll cross my fingers some of you have looked into and are on your way to completing step one.


- Posted using BlogPress from my iPad

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