|You Are Great With Money|
You know the value of a dollar - and you save and spend wisely.
By living below your means, you've set yourself up for a rich future.
And while it may hurt to sacrifice now, you'll probably have plenty of money later on.
You're on your way to riches - just keep it up.
Apparently, I am. But I can't take credit. My wife an I live by the priciples taught by Dave Ramsey. He says we should manage money like "God and Grandma" tell us to, meaning, use Biblical values and common sense not letting our emotions interfere.
Dave Ramsey teaches three principles and seven steps.
The three principles are:
- Live within your means. Don't spend more than you earn.
- Budget. Know where you money goes and plan where it should go.
- Avoid dept. Don't borrow money, period.
The seven steps he teaches are:
- Build a cash reserve of $1000 fast. This is for the emergency situations none of us can predict.
- Pay off all debt as fast as you can. This excludes a mortgage which is paid off in step 6.
- Build up a savings equal to 3 to 6 months of expenses. This completes the savings begun in step 1.
- Invest in retirement. None of us want to work forever.
- Build up a college fund for your children. Obviously, if you don't have kids or if they are already on their own, this step doesn't apply.
- Pay off the mortgage. This will completely rid you of any debt.
- Invest and give. By this point, you should have more ability to do what you want with your money.
So, where are we? Well, we're on a modified step 6. We don't have kids so we skipped step 5. Currently, we're saving money to purchase a house. We want a really good down payment so that 1. we'll have a small mortgage and 2. we can pay off that mortgage rapidly. We don't want to have debt the rest of our lives.
If you haven't discovered Dave Ramsey and his teachings, you need to do so.