Money was always a problem in my family home. We never had them.
We struggled a lot, as a family. There was no money for basic things, often even for food. My Parents (as much as I love them), they did not know how to save and manage the money. What they had they always gave away to the other Family members ( cousins, sisters etc.), having zero € left for themselves. Was this the Act of love? I say rather: ACT OF STUPIDITY. Now I know this, after the last 7 last years I spent on regularly sending money to my Family. I finally realised that enough is enough. I am not helping them by giving and I am not growing either.
As my Parents did not really teach me about the money I am getting my financial knowledge from the books and courses. I am also a huge fan and follower of Ramsey Show. This Guy is a Genius! The 7 Baby Steps really is a life changer. It shows you the new way of dealing with the money and how to have a full control of your life.
These are the 7 STEPS:
SAVE 1000 € TO THE EMERGENCY FOUND
Bad things will happen sooner or later so better be prepared for the rainy days. Dave suggest to save up the 1000$ as quick as possible. This is the first thing you have to do. Keep the money for the emergency. Emergency is not the Christmas gift or holiday. It is the emergency. Start now. This is the hardest step but necessary if you want to gain the Financial Freedom.
PAY OFF ALL THE DEBT USING THE SNOWBALL METHOD
Except your home pay. List all the debts you have from the smallest to largest and attack each of them with a minimum pay. When Debt number 1 is paid off attack number 2 with the money you have used on debt 1. When number two is gone, attack number 3 using the money from number 1 and 2. You will see the result quickly, your self belief will grow. Your life will change.
SAVE 3 TO 6 MONTHS OF EXPENSES FOR EMERGENCIES
As Dave Ramsey suggest you can not do the Step number 3 without having done number 1 and 2. Now you are ready to build your emergency account. This is not an investment account. These are the money ready to be used when the life will happen. When the rainy day will come, you are secured.
INWEST 15% OF INCOME TOWARDS RETIREMENT
Never really though about this till the age of 30 when I realised how the life goes fast, and how soon we will get to retirement age. 70 years old and what? Depended on Kids, on the Government , worry about tomorrow? This is not how I want to live my life. I want to be worry free, stuff free, travel the world with my Family, Give the things I never had. Start thinking about your retirement now. It will come. Sooner than you think.
SAVE FOR COLLEGE FOR KIDS
Do not save for college kids if you don’t have emergencies. Also Dave Ramsey say:” Do not pay for the college from the emergencies found” . Your kids college is not an emergency. Make them work while they are in college and send them only to the college you can actually afford. Ideally pay cash.
PAY OF THE HOUSE
The research shows that over 97% of people do not systematically pay extra on their mortgage. Now when you have all the debts paid, you are saving up for your retirement , your kids are in the college, NOW it is time to attack the mortgage and pay extra on it. Imagine the life without debts! Imagine what you could do, where could you go!
BUILD ALL WEALTH AND GIVE AWAY
You can do anything you want. You can enjoy the life with your Family, you can have life you dreamt of. You can give away and help others.
Now it is your time to tell me what do you think about saving?