Welcome to 31 Days to Organize Your Finances. By the end of the month, my goal is to help you have a detailed financial plan for your family. We’ll talk about cash flow, budgets, debts, and all of the nitty gritty of our finances that might not be fun to talk about, but are so important to discuss. Please refer back to the original post for a complete list of daily assignments.
For years, my husband and I didn’t consider OUR debts to be wrong. To us, debt was a necessary evil. We even thought we handled debt well since we avoided credit card debt. We thought we were on the right track. And our car loans or student loans–everyone has those debts, right?
But then we discovered Dave Ramsey and well, we drank his Kool-Aid, and we now consider debt to be a far more serious offense than we once thought.
If you think differently about debt, that’s fine, but play along anyway today and see how you feel after today’s assignment.
Today’s assignment: Create a Plan to Eliminate Your Debt.
If you are married, as with all of the assignments, you must work on this plan together with your spouse.
The very first assignment in this series is to Create a Family Balance Sheet. If you completed your balance sheet, take a look at the liability or right side of the balance sheet. If you entered the numbers, look at the total number for your monthly liability payments.
Now answer this question, “wouldn’t you rather keep that money for yourself every month than send it along to your creditor?”
I know my answer is unequivocally, YES!!!!!!!!!!!!!!
If your goal is to be charitable to the departments stores, Sallie Mae, and your mortgage company than this assignment might not be for you and you can keep on making those payments.
But if you would rather keep that money in your own account so you can pursue your own dreams, give more money to your favorite charities, take a trip, save for your kids’ college education and/or your own retirement, then please, pretty please, take today’s assignment very seriously.
Once you have entered your debts into your balance sheet, create a plan to eliminate your debt. My husband and I created our Debt Freedom Plan back in March. We are following Dave’s advice and focusing our efforts on paying off our non-mortgage debts first, starting with the smallest debt and leading up to the largest.
We have years to go before our non-mortgage debts are paid off completely. For those months when I think it is going to take forever, I refer to our Debt Freedom Plan, because as someone much wiser than me has said, “a goal without a plan is just a dream.”
How do you view your debt? Are you trying to pay your debts off early? What is your plan? Let us know in the comments.
Please note, I AM NOT A FINANCIAL PLANNER. This series was written based on my family’s experiences. If you feel you need additional advice, please consult a certified professional.
My husband and I agree completely. We drank the kool-aid, too. First, we got rid of credit card debt, then car loans, and now we are tackling the mortgage. It is difficult to have a timeline as a goal as our income is inconsistent, but we do put all of our extra pennies towards the goal of being mortgage-free. The thought of the interest we are paying (even thought it is considered very low) still turns our stomachs. Thanks for the encouragement. It can get weary, but our patience will pay off.
Heather @ My Overflowing Cup recently posted…When All You Can Do Is Pray
That’s awesome that you’re only debt left is your mortgage!!! We all need encouragement, especially when the debt is so large and takes a long long time to pay off, but the end result will be worth it.