Financial Freedom – Anyone?

Financial freedom should be the most important topic on anyone’s agenda aside from dealing with current emergency situations.  When you are sitting watching television, when you are commuting to work, or when you are sitting poolside relaxing, there should be a small element constantly working in your mind about your finances.  Managing your money is not as simple as just reconciling your checkbook each month with your bank statement.  It’s not just making sure you have enough money in your account to pay your monthly bills.  No, it is all that and so much more.

My wife and I enrolled in the Dave Ramsey course (Financial Peace University) 6 months ago and with much amazement I can declare it was a sober event that really opened my eyes to what financial peace truly is and how much work it takes to get there.  It’s a marathon and as many of you know, a marathon is long and not an easy journey.  At the beginning of the class I was quite smug and thought I knew everything there was about good money management.  I was ready to blow Dave’s program apart with my intelligence.  I felt I was already doing a good job.  Even though I struggled from month to month trying to make sure all of the bills got paid, my thought process was, “I make good money, have a lot of nice things, therefore I must be a good manager of my money.”  The reality of the situation was, I was so far off base that you could have considered me not even in the game.

Dave’s system is set up in what he calls, “baby-steps.”  Baby-step #1 – stash $1,000 for emergencies ONLY.  Buying your favorite sports team event ticket is NOT an emergency, buying a new gun is NOT an emergency, missing your wife’s birthday and buying her an extra special gift to make up for your blunder…… well, that could possibly fall under the category of, “soon to be emergency.”  Seriously though, all of those examples are NOT emergencies.  Your car breaks down and you cannot make it to work without your car, that’s an emergency.  The plumbing in your house springs a leak, that’s an emergency.  The second baby-step is probably the hardest part of the system.  #2 – cut up all your credit cards (stop the bleeding) and start paying down your debt.  People do not realize how much any amount of debt keeps them down from realizing their dreams.

Case in point – You own two vehicles which average approx. $50,000 plus on top of that you have credit card debt to the tune of $20,000, student loans of 40,000 yada, yada, yada, you get the picture.  That’s $110,000.00 in unsecured debt and your credit rating is in the tank.  Let’s say you pay $120.00 a month towards the balance of that $20,000 credit card, that will take you over 8 years to pay that amount off and will cost you almost $30,000 total.  That’s an additional $10,000 you are paying that you did not have in your possession.  So let’s say you take the full 8+ years to pay off that credit card debt, do you think in that 8 years you have not added to that credit amount or perhaps one of your vehicles won’t need to be replaced?  It’s a vicious cycle that NEVER ends.  We live outside our means and there is nobody there to stop us but ourselves which we don’t do a very good job at managing this.

Plus on top of this mountain of debt, you have also financed a house for $300,000.00 with a monthly payment of $1,400.00 for the next 30 years.  And for borrowing that $300,000.00 and taking 30 years to pay it off, you will pay over 470,000.00 when complete.  The man has you beat down and you can hardly breath…..yet in your mind, you think you are doing okay because you can make your monthly payments from month to month but don’t have much else to live on.  You work for your belongings instead of enjoying them.

You can see how important baby-step 2 truly is and why it’s so hard to overcome.  The system Dave teaches is so simple but one that takes discipline and motivation.  It’s a system that anyone can apply and achieve if they set their minds to it.  In the past 6 months I have paid off more than 1/2 of my credit card debt, I am on a plan to have both my vehicles paid off within a year ($38,000) and will then be on a 4 to 5 year plan to pay off my house, 100%.  So imagine this – $1,100 house payment, $800.00 vehicle payment, $2,000 credit card payment, that’s 3,900 a month I pay towards debt.  So fast forward 5 years from now and my debts are paid.  I decide I want to buy a new truck that costs me $30,000.00 and I know I do not want to finance it but pay cash only.  30,000 divided by 3,900 equates to me saving for 7 months, 3 weeks.  Yep, that’s right, if I save for less than 8 months for a new truck, I can pay $30,000 cash and drive a new truck without taking on payments.

Of course the following baby-steps include saving to pay for your kids college (cash), increasing your retirement fund to the max and of course the most important of all baby-steps is to give a lot of your wealth away to those less fortunate than yourself.  Remember, you won’t have any bills except for your monthly utilities and you will be fully funding your retirement with a nice little nest egg in the bank, what will you do with all that extra left over cash?  That’s right, one of the things I forgot to tell you is that what Dave Ramsey teaches you is that you are now managing your money with Godly principles.  Dave is always bringing this type of money management back to Godly principles and the best part is…… they work.  Everything you own, belongs to God, 100%.  You might work to get that money, but God’s the one who provides us with everything.  So therefore, everything we have, belongs to Him.  Trust me, when you realize how awesome this course is and how motivating Dave’s teachings are, you will want to give your wealth away to those less fortunate than yourself and will do it simply out of pure joy.

To find Dave Ramsey online, simply click the link here I have provided and dive right in as, (http://www.daveramsey.com/home/), you can locate classes in your area and join this awesome system that will give you true financial peace.  I no longer stress from month to month like I did all the years prior to 6 months ago.  I thank God for showing me this system and for bringing financial peace to my household.