Saturday, February 5, 2011
Debt Free Dreams
With all that now behind us we still have credit card debt and a car loan to payoff. The first thing Dave recommends doing is establishing an emergency savings fund in the amount of $1,000. We have done that and we are on the second step which is creating a debt snowball. This is achieved by attacking your smallest debt and making minimum payments on your other debts and applying any extra funds to that smallest one until it's eliminated and then moving up to the next smallest one and applying all those same funds to that one debt and so on until they are all payed off. The next step is to save 3-6 months of living expenses in savings. This will help if there are layoffs or unexpected illness or any other curve balls life should throw at us. After that 15% of income should be allocated to retirement. Then comes college funding, paying off your home early and finally building wealth so you can give like never before. The cool thing is that it's all biblically- based. I am excited to coordinate a Financial Peace Course at our parish coming in March, it's a great opportunity to help others while at the same time helping ourselves through the awesome support that the classes provide. One of the most inspiring results of FPU was it's affect on Habitat for Humanity. They had a 33% delinquency rate from their homeowners making their very modest mortgage payments. They have now required that every client attend FPU, their delinquency ratio is now 0%. The program changes lives, I am blessed to have had friends go through the program and tell me about how they have completely changed their futures and the future of their children. Dave's motto is "If you will live like no one else, later you can live like no one else!"