Today's economy puts us to the test when it comes to our family's financial wellness. In general as a society we have become accustomed to borrowing from others to continue our lifestyles. Gone are the days of our grandparents where if you didn't have it, then you didn't spend it.
Dave gets back to this theory in his baby step 2. It is time to stop borrowing and start dumping the debt we have accumulated. For baby step 2, cut up those plastic borrowers and get back to using cash, debit, and checks. These things make you accountable for your purchases, you must have the money to spend it.
Now, list the debts you currently have smallest to largest (excluding your mortgage). This has no reference to interest rates or where you owe, but what the debt is owed the least and the most. Include all loans, credit cards, etc. Once you've done this it is time to start knocking out debt smallest to largest. As Dave explains "
Paying off debt is not always about math. It’s about motivation. Personal finance is 20% head knowledge and 80% behavior"
This step can take months to years depending on how long you have been borrowing. My husband and I completed this step and when we did God gave us a breath of fresh air because as I have heard Dave say.... "The borrower is slave to the lender"
I know this is a culture shock to a lot of people, but if in doubt check out more posts here:
Dave Ramsey Intro
Dave Ramsey-Baby Step 1
or visit. http://www.daveramsey.com
No comments:
Post a Comment