I subscribed to the Dave Ramsey Total Money Makeover program a few days ago and am anxious to track and report my journey to financial fitness. I have read both of Ramsey’s books and found them to be very helpful. Ramsey has a “7 Baby Step Program” to achieve financial freedom. He has quotable gems of wisdom that make one rethink how money should be spent. “Live like no one else, so you can LIVE like no one else!”; has been the mantra of fans of Dave Ramsey. He also refers to many of the items we buy as “stuffits”, stuff we don’t need that only clutters our lives and homes and empties our bank accounts.  After reading both of his best sellers, I tried my hand at Baby Step One, which is to save $1000.00 dollars and keep it liquid in a bank account or physically in your home. The reasoning behind this is that most expenses on our credit cards come form emergencies which are usually more than $300 but less than $1000. If you use cash, you avoid using your credit card which will cost you the added interest charge and let’s face it, who pays off their credit card balance every month? If there is an emergency that would require you to pull out your credit card, you use the cash instead. Then you restock your emergency fund to $1000 and go ahead or resume pursuing Baby Step 2.
So I started our $1000 emergency fund. I decided to keep the liquid savings as cash at home. I aggressively gathered the money and had my savings put away in an envelope in a locked box in my bedroom. ( I made it hard for me to see and get to! As they say, out of sight, out of mind!) It wasn’t long before we had our first emergency. My husband’s motorcycle tire blew out and and we needed to replace it. We had the cash to pay it up front. We replaced what we used and sealed the envelope and put it back. That month, instead of adding to our credit card debt, we paid extra toward our existing credit card balance.   Months later, the dog ate an entire box off Valentine chocolates. He had to be rushed to the vet. (Chocolate can be toxic to dogs, especially a little min doxie like ours!) We went ot our emergency cash! The motorcycle brakes went out, we paid cash.
Through Baby Step One, we learned several things. The first thing we learned is that even though we thought we were only using the credit card for emergencies, we really weren’t. We were only fooling ourselves. When we had to discuss the incident that required us to go unlock the box, unseal the envelope and touch the cash, we realized what was a  what was a want!  We also were able to negotiate with cash in ways you can’t with a credit card. The plumber would much rather have the cash than take a credit card and will be willing to negotiate.
We had to discuss a need v.s a want and realized, sometimes an incident can ride the line between both. We had wanted to get another miniature doxie and had been keeping our eye open for one. We found one through our local the dachshund rescue. This puppy had been abandoned and left in a small crate with 2 other dogs. She was underweight and very scared. Dog rescues have financial responsibilities and therefore need to charge people who rescue these dogs.  We knew this dog needed our family and we need to rescue her. We felt good about paying the $300 required to cover her vet bills and paper work. Yes, this was a want, that became a need, and thanks to our newfound attitude toward money, we had the cash to rescue our newest member of our family and continue to pay down credit card.
We continued on to Baby Step 2; pay off credit card debt. We made great progress! Then, as Dave Ramsey warns, Murphy (Murphy’s Law) came knocking at our door and my husband was laid off.  Thanks to following just the first 2 Baby Steps of the Dave Ramsey program, and by adjusting our attitude toward spending and saving, we were in a much better place than other families who lost thier income.  We were able to access our home equity loan and even 2 months into this experience, we have only needed to borrow from it to pay one bill so far.
I will be blogging about our progress. I do encourage you to go to your local library or book store and pay CASH for one of Dave Ramsey’s book and begin your own journey!