Last week, as I was doing mindless data entry, I was listening to Dave Ramsey podcasts. I have a subscription to “My Total Money Makeover” website (www.mytotalmoneymakeover.com), which includes forums, online budgeting software, and commercial-free access to podcasts of Dave’s radio show. Lately I have been too busy to spend much time on the forums, but I have all my budgets stored on the site (since June 2011) and enjoy listening to the podcasts when I need a shot in the arm.
I was listening to the show from February 28, 2013, and in Hour 1 Dave outlined five things people should do in order to prosper:
1) Stay out of debt
2) Be on a budget
3) Be a giver
4) Be a saver
5) You have to learn to work with other people. You must build quality relationships with others, and that starts with your spouse/significant other.
So how do we accomplish these five steps? Here are my thoughts on them:
1) Getting into debt is dumb. (Oooh, nice alliteration there.) Some people say that “debt is a tool,” but that is a lie we tell to make ourselves feel better about our stupidity. Debt does not help you get ahead – it only hinders you. Think about ALL the things you could do if you didn’t have debt or loans. I often think about how much money I’ve lost towards payments in the past three and a half years (ya know, just about $70K) and realize that I would be sitting pretty right now if I would’ve been paying myself with that money – in other words, saving and investing. The borrower is ALWAYS slave to the lender – that is a spiritual, philosophical, metaphysical fact. So if you have been stupid enough (as I was) to take out massive amounts of debt (or even if you were only a little bit stupid), acknowledge the facts and start cleaning up your mess. Usually this involves “getting mad” or having a fire lit under your butt for any number of reasons. Make concrete goals for yourself – for example, I want to reach X amount in debt by X date. (My current goal is getting to halfway, which is $70,000 by Easter.) Or, think about what you want to do once you become debt free, and set milestones along the way for mini-celebrations and victories. Find what motivates you, whether it’s pinning up a picture of your dream home, journaling about your successes and frustrations, or listening to DR podcasts.
2) You CANNOT get out of debt or be prosperous without a budget. I know there are people who think they can keep all this information in their heads without writing it down, but I beg to differ when it comes to budgeting one’s money. (Sorry to all you men who pride yourselves on mental list-making!) Before I made a written budget, I was doing fine. I was paying my debts on time, I wasn’t over-drafting on my bank account, and I wasn’t a spend-a-holic. But guess what? “Doing fine” often means “being mediocre,” that is EXACTLY how I was. I was not gazelle-intense about paying off debt or allocating my spending and saving dollars. As soon as I began living on a budget, I felt like I actually had more money, and I also was more motivated to make more money. Now, making a budget every month is a deeply ingrained habit. I would feel naked (or, at least my money would) if I didn’t budget for a month. I check my online budget at least once a week, as I do my checking account, to make sure I’m on track. If I need to change something, I go into the MyTMMO budgeting software online and alter whatever category it is, making sure my spending equals my income. (Of course, married people need to consult with each other before making any major changes to the joint budget. What qualifies as “major” depends on each couple and their income.) And yes, I admit: budgeting has become a hobby. (Lame, I know.)
3) The last lesson of Dave Ramsey’s “Financial Peace University” course is entitled “The Great Misunderstanding.” In this lesson, he talks all about giving – why we should do it and why that is the key to our financial well-being. He gives this analogy: sometimes, we feel like if we walk around with a clenched fist, tightly hoarding our money, we will have more money. But if we have a clenched fist, nothing can flow into it. However, if we have an open hand (i.e. are givers), we have the opportunity to receive as well. When we give, we exercise the truth that we are made in God’s image – because God is the ultimate giver.
4) The only way we will have money is if we work for it and if we save some of it. This includes investing it wisely. Certainly we cannot save EVERY penny we make (see #3 regarding hoarding), but having an Emergency Fund is a necessary part of life. Dave suggests having 3-6 months of expenses saved, and those with a bigger, more active “security gland” will have more saved up. Then, when Murphy visits your door, it is not a crisis trying to pay for the emergency.
5) I love how blunt Dave is: “Don’t marry a self-centered brat” and “Jerks don’t get ahead,” he says. He also reminded his listeners that “being able to work well with others, beginning with your spouse…is a direct indication of your future prosperity.” 1 Peter 3:8 says it a little more gently: “Finally, all of you, be like-minded, be sympathetic, love one another, be compassionate and humble.” Married couples NEED to communicate about their finances, as well as those thinking of or planning on getting married. The Warrior and I began talking about our personal finances just a few months into our relationship, so we have been transparent with each other from nearly the very beginning. As ridiculous as my debt was, I did not hide the fact from him that I had over six figures in student loans. We regularly give each other updates on our spending and our debt levels. (I am proud to say that The Warrior is just a couple months from becoming completely debt-free!!) We do this because we are aware that the #1 cause of divorce are money problems. It is hard enough to maintain a military marriage, so add financial troubles into that mix and we could really have a disaster on our hands. Financial readiness contributes to mission readiness, and this applies during deployment or in garrison.
I could keep going on and on about finances, but since it’s 11:52 PM on Friday I had better wrap it up! I will close with this reflection, which keeps everything in proper perspective:
“Take good care of your flocks, give careful attention to your herds; For wealth does not last forever, nor even a crown from age to age.”