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Breaking Free! January 27, 2011

So many people in this world are in debt; with houses, school, cars, credit cards made for literally everything you can thing of and so much more! It’s not only people either our country is in a huge amount of debt.

 The husband and I took a class offered at our church, Financial Peace. It was very eye opening and blunt with how we live and how we “could” live. Us now having the knowledge and understanding what this could mean, being debt free, we are going to do it! We have talked about it ever since we took the class(around 2 years ago!), this year is “the year”!

BABY STEP 1: $1000 to start emergency fund
this is our first step and we are already about there
(2-13-11)!

BABY STEP 2: Pay off all debt using “snowball” method
(this is the method of paying of your smallest debt and then putting that payment into the next smallest, this just keeps repeating until the largest debt is paid off)

–last night we have gotten all our debt in order from largest to smallest and will start this process Feb 4th, 2011.

BABY STEP 3: 3 to 6 months in savings
( this is just like step 1 but more. Think: what would it take for me to live 3-6 months with no income?)

BABY STEP4: Invest 15% of houshold income into Roth IRAs and pre-tax retirement

BABY STEP 5: Saving for college, you or a child. ESAs & 529 plans

BABY STEP 6: Pay off your house early

BABY STEP 7: Build wealth and give to other!! Now debt free!!

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