A lot of us know that we ought to save, invest, and spend money, but what most people do not know is that there is a simple step that they can follow in order to achieve financial peace.
Many people try to save what is left after spending their money, and several studies have shown that this is not a winning strategy. To win with money, you have to tell your money where to go at the end of each month when you get your pay check.
If you do this consistently over many years, you can achieve financial freedom and attain a state where you don’t have to get all stressed up about money.
Below are some simple strategies that I learned listening to Dave Ramsey – America Mr. No debt.
Budget is your friend
I like the way Dave Ramsey put it, you have to whip your money and make them behave by telling them where to go. Budgeting is about being discipline, but unfortunately most people do not enjoy the budgeting process and that is why many get into debt. If you’re a medical director and not a senior accountant, budgeting might sound like the last thing you want to do during your time off.
Budgeting will help you allocate your God’s giving resources appropriately, so you don’t end up wondering where your money went at the end of the month. There are so many budgeting apps out there that you can use to manage your finances.
I started with Mint before I got to know about Dave Ramsey’s – ‘Everydollar’, the world’s best budgeting app. I have also heard some positive feedback about ‘Goodbudget’. Whichever you decide to go with, make sure you start budgeting immediately.
Live within your means
In a world of instant gratification, most people want whatever they want right now. From Phoenix, Arizona to Norfolk, Virginia, there are millions of people living in homes they cannot afford, driving cars on credit, and going on vacation courtesy of Master and Visa card. If you don’t have the salary of a mechanical engineer, don’t spend like one
If you want to achieve financial peace, then you need to know how to wait for some of those wants in your life. You should stop spending what you do not have. If you continue to live within your means, after so many years, you will see the results as you will start accumulating surpluses.
Get out of debt
Dave Ramsey, through his Financial Peace University has helped millions of people to get out and stay out of debt. He has helped create many millionaires through his podcast.
To win with your finances, you need to ensure that you don’t get into debt, and if you are already in some form of debt, you need to work hard and get out immediately.
As Dave will say, during the period you are working to get out of debt, you should work hard by taking on extra jobs, deliver pizza, drive Uber, don’t go to a restaurant except if you are working there, sell stuffs to the extent that the Children will think they are next, and you go on rice and beans, beans and rice nutritional plan.
Follow the baby steps
The baby steps are simple yet genius. I have read several books on personal finance, and I found Dave Ramsey’s baby steps simplest to follow. Notice that I did not write ‘easy’, that’s because it takes discipline and total commitment to stay the course to achieve financial freedom.
Let’s face it, as humans we want the latest and greatest gadget, we want to drive the newest car. It is difficult to wait to get what we want sometimes, but if you keep the vision in perspective, you can join millions of Americans that are doing their “Debt Free Scream” on the Ramsey’s solution.
Here is a quick summary of the baby steps: Save $1,000, Pay Off Debt, Save 3-6 month emergency fund, Invest 15% using a service like Fidelity, Save towards college, Pay off home, and give. Get your copy of the “The Total Money Makeover” for more details.
Align with a purpose
At the end, the overall vision and mission of getting out of debt and achieving financial peace is not just for the fun of it. It is about changing your family tree. For most people, it is about having a good life during retirement, having the ability to move from “have tos” to “want tos” and above all, being able to give and be a blessing to others.
It is about building your dream future, where you will not need to depend on government or people around you to survive. Financial peace is about creating choices and options for a good future for you and your family.
I have listened to countless hours of “the Dave Ramsey Show”, I have gained lots of wisdom from following his principles.
For me, my motivation for staying engaged on this journey is in the intro of the show, which says “It’s the Dave Ramsey show, where debt is dumb, cash is king, and a paid off home mortgage has taken the place of a BMW as the status symbol of choice”.
We all have a choice, are you going into debt so that you can be like everyone else? What choice are you making today? Choose wisely, so that you can live and give like no one else.