Organizing our Financial Lives

When I shared with you my resolutions for 2012 I mentioned that I wanted to get organized. Now I didn’t mean just one area in my life; I meant organization across the board. And the organization played a roll in the other resolutions I’ve made. Honestly it had something to do with almost every resolution on my list! But the one that came the easiest and the hardest was my resolution to start saving and budgeting. In the second week of the New Year I thought I’d tackle this resolution head on. I had already started a cleaning schedule for the home and was ready for one more challenge.

The first place I went to in an effort to find some sort of system to follow was a message board I’ve belonged to for quite some time. The ladies on there have been there since before the birth of my son and have always had great advice when it came to just about anything that popped up in life. And a few of the ladies suggested I read Dave Ramsey’s Total Money Makeover. They had and it changed their lives for the better! So I grabbed a copy for my e-reader and set to work reading everything he had to say. And as I read I got excited. I was pumped and I KNEW I could follow these easy steps to financial success (no, this is not a paid/sponsored post… I really am this excited!).

The Challenge (or as Dave calls them, Baby Steps)

The first step (Step 1) seemed to be the hardest one to fathom for me. Save $1000 for an emergency fund. And save it fast… within the first month of starting. Saving that much cash in such a short amount of time for our emergency fund seemed impossible. But then I put together our budget for that pay period, found extra cash hidden in different accounts, and started pulling them together.

After I hit the bank accounts I started in on our coins. I grabbed our coin jar and started sorting and rolling. Sure… laugh at me. But the coins in our house and cars equaled $177! Amazing, right?

The next weekend I had a garage sale and added more to our total. And anything that didn’t sale at the garage sale was put up on Craigslist. Any penny I could get from the stuff we no longer used was a step in the right direction and I put it all up for sale online. And guess what? By the end of the first two weeks, I had the emergency fund Dave suggested. I placed the money in an account we never use (to keep us from temptation) and called it done! Boy was that a relief.

Along with saving that emergency fund we also re-evaluated our lives. We needed to cut back.

First I tackled our eating out.

Now I don’t know about you but we had a big problem with this. I love to cook but some nights I was finding every excuse to just have my husband pick something up instead of making dinner because “I didn’t feel like it.” Well, no more! We came up with a reasonable budget for eating out once a week (or saving up the money for a “fancier” dinner once every two weeks) and allotted funds for splurges at lunch or at coffee shops every once in a while. We’ve been doing this for 4 weeks now and I don’t think either of us feel deprived. We prepare our lunches at home and are even making healthier choices with the changes.

Next came our bills. 

We made sure that everything started to get pulled out of our checking account instead of being charged onto the credit card. We didn’t realize how many times we set something up to be auto-paid from a credit card. The fear of putting our debit card number on the web was now being overshadowed by our fear of debt building. We didn’t realize how much was being put on the card and NOT being paid off each month. Little debt turn into big debt and then… it’s a never ending cycle.  

So we are not using our credit cards for ANYTHING.

What if an emergency happens? Well… we have our emergency fund!

Now that we have a budget and aren’t using our credit cards I’ve been able to pay off the first debt of our Debt Snowball (Step 2). Paying off that credit card and saying good riddance was an amazing feeling. And I cannot wait to do it again and again! We’ve lined up our debt using the handy Debt Snowball tool Dave offers and are making every effort we can to save up our extra funds to put towards the next debt on our list. Before we know it we’ll be debt free and onto the next step!

Once we pay off the debt we’ll be moving towards the savings part of the plan. Once we have 6 months savings (step 3) in the bank I’ll be able to breathe a lot easier.

I really love how easy the plan is to follow once I really jumped in and stayed focused. Sure I’m tempted to go out with the girls for a nice night out or go to the movies with my husband when we don’t have the money to do so but I am diligent about making this work. If I want to go out with the girls I’ll save up our restaurant money. And if I want to see a movie I’ll go to a matinee and use our entertainment fund. Sure, we aren’t as sporadic but we’ve been great at becoming resourceful and frugal. If we live this way and get ourselves to a more stable financial place then we’ll be able to do a heck of a lot more later!

Since these are baby steps I don’t want to get further down Dave’s list just yet. But I will keep an update every time we hit another step. I mean, it feels too good not to! And if you’re interested in getting on track and want some financial peace I highly suggest checking out Dave’s books and even listening in to his radio show.

Have you started gaining control of your finances recently or have you always been in control? I’d love to hear any tips you have to share!

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