Ok. Focused writing, here we go.
A little over a month ago, on 10/28/12, I wrote about how I needed to re-focus financially. I decided that I needed to re-read and finally implement the suggestions contained within Dave Ramsey’s book, The Total Money Makeover. So…a little over a month after this decision, has this frog jumped off the log…or am I still on the log, having merely made the decision to jump? (I’m curious to see who actually “gets” my analogy, but I digress)
So far, I have read 132 pages of the book. Currently my focus is Baby Step 1, which is:
- Save $1000 Cash as a Starter Emergency Fund
For me, I have to write this out and be very deliberate in my financial activity because at 35 years old, I still don’t have a firm grasp on my financial well-being. I seem to make good progress in this arena…and then as soon as some progress is made, I seem to find a way to firmly implant my head up my ass again until I lose traction and find myself starting over again. After declaring bankruptcy in my early 20’s, this has been a pattern for me. Luckily, each time, I seem to implant my head a little less into my ass, making the extraction process slightly easier.
With that said, I typically have a $1000 Starter Emergency Fund in place, but over the past couple of months, I found myself dipping into this with some stuff that had come up that I decided to call “emergencies” – unplanned car accidents, medical and dental expenses. I believe these all to be legitimate “emergencies” rather than the typical stupid stuff that I have previously used as an excuse to dip into that cash…so I’m not beating myself up too badly for this. Rather, I’m focusing on simply trying to re-establish the Starter Emergency Fund.
Having that Starter Emergency Fund really provided me with a peace of mind that I would like to regain. Being debt free provides more peace of mind, and while I don’t have a significant amount of debt, I have acquired some over the last couple of years. Having recently determined the “next phase” of my life – getting back out of debt and saving up money to move forward with this “next phase” has moved towards the top of my priority list. On November 26, just about a week ago, I recalled that the last time I reflected on the “areas of importance” in my life, I had them categorized as:
Today, reflection during my “Weekly Review” shows the Areas of Importance in order of:
- Work / Career
- Community / Socializing
- Volunteer Work
Financial is listed as #7 based on the amount of time that I had been spending on it. I am working on changing this. To accomplish my goals of moving back to Ohio and helping my parents grow their farm, the Financial part of my life needs to be priority number 1. In order to make this priority #1, I have been reading The Total Money Makeover and trying to follow the steps exactly as outlined in the book. While seemingly easy, I am struggling with this. Often times, I find myself wishing I was spending my time doing other “fun” things. I am so quick to forget that I have spent the bulk of my life doing these “fun” things. It is this behavior that led me into debt in the first place. The total money makeover is part of the whole life transformation that I have been experiencing for my whole life, but more specifically in 2012, which has been the most remarkable year of my entire life.
In conclusion, I began my debt snowball on paper, located on page 112 of The Total Money Makeover. Being the nerd that I am, I determined that I might like to try using Excel to track and visualize my progress. Research led me to finding many spreadsheets on this matter and I zeroed in on one titled the Debt Reduction Snowball Calculator by Vertex42. This website, Vertex42 seems to have lots of practical templates for Excel and warrants further exploration in the future.
Besides working on my debt snowball, it is time to work on and begin utilizing an actual budget. I have had some success with using YNAB or You Need A Budget program. However, my progress has stalled with this, much in the same way that it stalled out with Quicken in the past. However, in reading some blog posts by Chris Hoffman (whoever this is), he suggests doing everything on paper before utilizing a spreadsheet (Dave Ramsey’s actual suggestion).
This is what I will be working on next and will probably reference Dave Ramsey’s other book “Financial Peace University” in order to really wrap my head around effective budgeting. With that said, Chris Hoffman did create a great spreadsheet based on Dave Ramsey’s budgeted plan. To read about that, check out Chris Hoffman’s blog post titled, “Dave Ramsey Monthly Budget Excel Spreadsheet (The Original)”