ShannonAlbert.com - June 2009

We do OK money-wise and never really have to worry much. We live well below our means, we don't have car payments, we don't have credit card debt, we do have savings, we do have some retirement and we have some college savings for Payton. But we haven't had a really good plan in place for where we want to go.

I recently considered calling a financial planner to help us sort things out and make sure we were ok and to help direct us on what we should be doing financially. Then I remembered that we usually disagree with what financial planners recommend.

I decided to get the book called Total Money Makeover by Dave Ramsey. He has a radio show, is on TV and has written multiple books. I've never heard or read or watched him but I knew he was in alignment with Andy's general way of thinking so I bought the book. His general philosophy (and Andy's) is that you should be debt-free, not use credit cards and get to the point where you are paying cash for everything. Andy and I both read the book and we're ready to go now.

He has seven "baby steps" that he suggests for financial planning.

1.) $1,000 to start an Emergency Fund
2.) Pay off all debt using the Debt Snowball
3.) 3 to 6 months of expenses in savings
4.) Invest 15% of household income into Roth IRAs and pre-tax retirement
5.) College funding for children
6.) Pay off home early
7.) Build wealth and give! Invest in mutual funds and real estate

The book has many examples of families who have worked through this program who were in pretty bad shape but still did it. People usually take a few years to get through the first few steps but I predict it will take us 6-8 months. We're in a good position having already done much of it before now (we've always had step 1 in place since we've been married, for instance). I'll be discussing some of the steps here over the next several months as we make our way through.

This week will be establishing a budget (something we've never done as I really hate it), canceling credit cards and getting rid of unneeded expenses. The weird part is that I'm really excited. I love a good plan!