Three years ago, when we were in the process of buying our house, a friend joyfully handed over their copy of The Total Money Makeover for us to borrow. What a life changer!
Dave Ramsey had a lot of great advice about taking steps to become totally debt free and how to keep track of your money in a smart way. My church even provides classes with his Financial Peace University methods.
His baby steps are easy to follow:
1. build a $1000 emergency fund
2. pay off your debts (except mortgage) by using the debt snowball
3. save 3-6 months of expenses (we're currently right here)
4. invest 15% of your income into Roth IRAs and pre-tax retirement plan (like 401k)
5. save for your kids in a college fund
6. start paying off your house mortgage
7. build your wealth and give back!
While we weren't as destitute as a lot of the couples (we didn't have huge amounts of credit card debt), we still benefited from his wisdom and advice. I didn't agree with everything he said, either, but his principles are really good. Like, I don't agree with the no credit card rule, but I do agree with the fact that you have to pay off the balance on your credit cards every month...basically, don't spend what you don't have.
To this day, we are still actively following Dave's advice about money. Though we slip up sometimes (and spend more than our month's income), we still persevere and try to better the next month.
Anyway, I try to pass on Dave Ramsey's advice to as many people as I can (I even had a good friend try it and succeed!). Here is his website, if you'd like more information. He also has a radio show where you can call in for help; find your station and time here.
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