“If you will live like no one else, later you can live like no one else.” ~ Dave Ramsey
I’ve read this book a few times, and I’ve heard rave reviews about Financial Peace. Full disclosure note: I haven’t ever gotten the workbook, so maybe that needs to become a priority in order to have the full experience?
Personally, I struggle getting through the book without having a full-blown panic attack. I realize that I don’t have good financial skills — I didn’t pay a bill or even pump my gas until after I got divorced when I was 25! I always promised myself that I would teach my kids better, but I didn’t have the skills to pass on. I think the best I ever was in practicing good financial fitness was when I ran the San Francisco Rock ‘N Roll Marathon in 2007. The big girls and I put an enlarged balance sheet up on the wall with pictures of an airplane, hotel, and places we wanted to visit while in San Francisco. Whenever they asked for something extra (like going out to eat), I asked, “Do you want this or the vacation more?” If they wanted the vacation more, we automatically put the amount of the other item in a jar to fund the vacation. I’m not sure why I stopped putting financial goals up and working toward them . . .
Back to the book. I realize there is a problem, and I’m ready to do the work — there are only 7 steps after all! Dave says that you need to complete the step before you can move on. If you slide, you have to go back. For example, if you save up the $1,000 (Step 1) and are working on building the debt snowball (Step 2) but dip into the savings because the washer goes out, you go back to Step 1 until it is complete again.
.5: Realize there is a problem. Own your problem and then build a 0-based budget. Give every dollar a name in the budget. The paper is the boss of the money, and you are the boss of the paper. Stick to it and keep it balanced.
- Save $1,000 for an emergency fund in liquid cash.
- Start a debt snowball. Everything needs to be paid off in 18-20 months or needs to be sold (house not included). List all debt smallest to largest then focus. To get the snowball running, sell everything you can. Make the kids worry you will sell them. Increase your income.
- Increase your emergency cash fund. 3-6 months of expenses in savings.
- Invest 15% in retirement.
- College savings.
- Pay off the house.
- Build wealth to have fun, invest, and give.
I am currently stuck on Step 2: start a debt snowball. I’ve got a budget, but it is not working like I need it to. WIth five kids, things pop up each month that need to be taken care of that I hadn’t budgeted in. Just today, B tore her only pair of pants, C needed stuff for a huge school project, and R had a fundraiser for Royal Rangers (like boy scouts but run by the Assembly of God church). The budget was at a 0 balance, and it has been spent according to plan. I have to dip into my savings — B is not allowed to go to school without pants, and C has to keep her grades up. The fundraiser we could have skipped, but then I feel guilty for not helping out the organization that is doing amazing things for my boy. GRRRR! Here is where the anxiety starts to sky-rocket, and I know the OCD is going to kick in and obsess over the budget all night.
Mom guilt moment: I have worked my full-time teaching job, worked a part-time job, and tried to stay up on housework and kids’ homework and be a good mom for the past three years. Oh, and I finished up my master’s degree. I’m currently only working the teaching job and being a mom. I’m not willing to sacrifice to get another part-time job at the moment. My kids need me to be the mom right now. They really suffered with me being gone and not there for the day-to-day when I worked the second job. How do I be a good mom by being present for them, but also be a good mom by providing financially for them? I feel like we miss out on experiences — last year was the first family vacation we have taken since I remarried. Either way, I feel guilty for not doing enough, being enough . . . and this is my secret biggest fear for real: not being enough. I tell my kids my biggest fear is sharks, but it’s not.
There are no mentors for this problem. I’ve prayed about it for years and pushed through the best I can. And here we are. Stuck on Step 2.
1 thought on “Review of The Total Money Makeover”
Very straightforward and useful composed. I actually enjoyed this article.