You’re not budgeting You’re not 100% focused on your lowest balance Your income and expenses are remaining the same Your spouse isn’t on board You aren’t consistent You aren’t tracking your progress
This is the step that I struggle with. The Debt Snowball. It would be easier to pretend like I didn’t have issues with this, but I am not. Most wounds don’t heal unless exposed. After Renardo and I remarried, we began budgeting, saving, and hustling for our dream…owning a home. We managed to obtain our dream only to slide back into old habits. After obtaining our home, we generated more debt. We recently bought a new house, a new car, among other things. We were sensible in our purchases, and can afford everything we bought, but we did not go in the direction that was most beneficial to us. Debt reduction. A lot of the pointers that Dave Ramsey espouses, we did not follow. So, I know the struggle is real. Step 2 is the step that I struggle with. One of my goals is to one day overcome our hang-ups and get this step neatly tucked under our belt. I am going to linger on Baby Step 2, the reason I, and possibly you, are failing for this article and the next article. I will talk about the first three reasons for failure this article and the last three reasons for the next article.
Setting a budget. This is the foundation of everything. Setting and sticking to your budget. You have to list all sources of income out, your job, alimony, Social Security, Disability, your side hustles, bonuses everything. Even if it is not routine. Then you must list the different places that your money goes, bills, housing, food, transportation, health, personal, insurance, are just a few. If you are unsure, you can look at what you spend money on in your bank statements. Dave Ramsey says that you should have every dollar of your budget allocated to something (to include paying off debt). One of the things that I find with my budget is that I have things that crop up that impact the cushion I have for my finances. Since we have moved in, there has been something new every month with our home that we have had to take care of. We replenish the emergency fund, but I really hate that we aren’t saving as much as we used to.
Listing all of your debts in order and paying the minimum on all but the smallest debt. You should list the most important debts or expenses first: food, shelter, utilities, and transportation. I currently have four credit cards that I am working on paying off and two car notes. I recently paid off one credit card (Yay!), so I am swinging the payments from that one to the next lowest credit card. The biggest issue is not recharging the credit cards, so I just don’t carry them with me. I know I should cut them up, but like I said, I’m a work in progress. If you can bring yourself to cut up your cards, I give you mad props. You’re my hero. After I am finished with college and start back working is when I plan to cut them up.
Your income and expenses are remaining the same. This is the toughest part of the debt snowball. You pay the minimum on all but one of your cards, but you only see the change in one card or debt. The big motivators are great…i.e. paying off one card or debt, but they don’t come every month. If you are fine with where you’re at, then keep doing what you’re doing. If you want things to move a little faster, you have to put in some extra effort in some other areas. It’s the only way. You can make cuts in your budget like cable, subscription channels, cutting back on eating out, anything that lowers expenses. You can increase incoming cash flow by having yard sales, getting a second job, or renting out a room. Anything to bring extra cash into your home.
I look at all of the success stories on the Dave Ramsey Show, and I think to myself, why can’t that be me? I can be debt free. I can have my home paid off. I can become a millionaire. Then naturally, I think of my family and friends, and I want to bring a couple of people along with me on the journey.
By Natricia A. Edwards
After I took the Dave Ramsey Financial Coach class I understand a lot of the concepts and rationale behind a lot of the steps. I hope to share these steps and tips with everyone in future articles. I cut up all of my credit cards, paid off another credit card and am on cloud nine about our journey to financial freedom. I hope that other family members will consider or perhaps join us on this journey as well.
ReplyDeleteThese cars really keep us broke don't they? I go in a lot of people's houses with my side hustle. Most people's cribs are chaos, plumbing been busted since the Reagan administration, deadly black mold growing everywhere, but come Sunday, the church parking lot is on point.
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