The Total Money Makeover

So I got a bit of really sound advise this weekend when I went down to Salt Lake on Saturday to go to a Dave Ramsey "Live Event". Anyway, I thought I'd pass along a cliff note's version of some of the stuff I learned. It's really worth knowing, so I figured it's really worth sharing. For those of you who don't know (that included me just a couple of months ago), Dave Ramsey is a well known financial guru. He reiterated that nothing that he talked about was original stuff. In fact, most of it is found right in the scriptures which are thousands of years old. God knows what He is talking about, who knew? I guess it's the putting it down in a pretty, concise, and easy to follow package. He talked about certain "baby steps" you have to take to reach financial freedom. His motto for the seminar was, "If you will live like no one else, later you can live like no one else." So in other words, if you will sacrifice now and don't get all of the stuff that the world tells you that you need, you will be debt free and answer to no one financially when everyone else is drowning in debt and are slaves to their lenders.

So baby step 1: Get $1000 for an emergency fund.

Baby step 2: Pay off all debt using the debt snowball (excluding your mortgage). That is paying off the debt with the smallest balance first then using the money that gets freed up to use toward paying off the next and so on and so forth. This one can really start to hurt because that also means not buying extras, not using credit cards, and delayed gratification then squeezing all the money that you possibly can out of your budget and throwing it at the debt until it is totally gone. That could take a while of living extremely tight and that is really hard to do. This is where you really have to get down and dirty to define what you really do need. That's a hard one. And it doesn't stop there, because then you have...

Baby step 3: Save up 3-6 months of expenses. That means taking the money you were throwing at all of the debt and now putting it toward bulking up your Emergency Fund. Emergency funds must be easy to access, or liquid, so don't go putting this money in an account that will penalize you for taking it out. (A fully funded Emergency Fund is not a wealth building tool. It will rain, and this will be your umbrella.)

Baby step 4: Invest 15% of household income into Roth IRA's and pre-tax retirement. Compound interest is a mathematical explosion! $100 per month from age 25 to 65 at 12% = $1,176,477. Yes, that is over one million dollars. So start immediately after you've accomplished step 3.

Baby step 5: College funding - making sure the kiddos are financially fit too. An Education Savings Account (ESA), or "Education IRA," funded in a growth stock mutual fund is best. Pay for college with cash. Don't let your kids get into a school loan mess.

Baby step 6: Pay off home your early. Your best option is a 15-year fixed mortgage with payments that are no more than 25% of your TAKE HOME PAY.

Baby step 7: Build wealth and give! Wealth is not an escape mechanism, it is a tremendous responsibility. Wealth will make you more of what you are. So if you are a jerk, you will become a bigger jerk. But if you are gracious and giving, wealth will give you the opportunity to give as much as you have always wanted to.

So there you have it. This is a huge process that will take years to "complete." I, by no means, am preaching. I have a lot to work on too, but I believe I can eventually make it to my goal and would like to give others this cool knowledge and the opportunity to work towards theirs too. Good luck and I hope this helps.

My First Pedicure....Ever!

Aren't they pretty?!
Clockwise from top: Devrie, Kim, me, & Kristy

I went with some good friends of mine (Kim Fitch, Kristy Perkins, & Devrie Jensen) on a Saturday morning to get a pedicure. I had never had one before, so I was glad I was with people who knew what was going on. The place we went to was pretty new and had these awesome chairs that were like lazy boys with foot spas attached to the front of them. They reclined and massaged. It was heavenly. The people who owned the place were Korean, so as they were working away, they'd make a comment here or there in their language. It's great when people do that, isn't it? They could be saying, "This girl has the chunkiest canckles I've ever seen!" And I'd just be sitting there smiling and nodding back at them. I'm sure they weren't saying anything mean though....but you never know. Another reason why I would much rather do this with friends is because you have someone to talk to besides the stranger clipping the cuticles around your toenails. I feel bad enough thinking that I'm making someone massage my feet...it would be so much worse trying to carry on a conversation in broken English with each of us asking "What?" every other sentence. I'm sure they were pretty relieved, too, that they didn't have to come up with something to talk to me about. Anyway, the point is...I'd probably never elect to get a pedicure by myself. But it really was great with the girls.

I'm Too Sexy for My Shirt....and Pants

Here's a couple of pics of Andrew on a Sunday afternoon. He thought he was just hot to trot...socks and all! I couldn't help but take a couple of pictures.

I just love my little man!