My 2017 new years theme is financial peace. We are huge fans of Dave Ramsey and we have in the past followed his methods of becoming debt free. We last stopped on baby step 3 and then I was laid off. We blew through our savings and started back on the road of bad habits that equaled debt.
This year we will take back control of our finances and start back on the road of financial freedom. My hubby wants to be starting baby step 4 this time next year. He is aggressive and we will definitely be able to achieve this together.
Along the way I will report back on our status with tips. Today I will start with my plans to save money. But first I will list out the baby steps so you will know exactly what I am talking about.
Baby Step One - $1000 in an emergency fund (couple) - $500 (single)
Baby Step Two - Pay off all debt but the house using the debt snowball
Baby Step Three - 3 to 6 months of expenses in savings
Baby Step Four - Invest 15% of income into pre-tax retirement
Baby Step Five - College funding for children
Baby Step Six - Pay off your mortgage early
Baby Step Seven - Build wealth and give
Knowing your finances and where you spend your money is key. Over the past couple months I haven't been necessarily budgeting but writing down all my expenses to see where in the world all my money was going.
Well, to be honest, I did this little experiment in November and December so besides Christmas shopping I know most of my money went to food and food alone. Bills don't even take up a 3rd of my paycheck so why am I spending so much on food. One word lazy.
We would eat out several times a week and feeding a family of five on take out can get a little pricey. Plus I must account for my growing boys. They are now really, really hungry like all the dang time. I've heard from other parents of teenage boys talk about this and lets just say they tell no lies. And I'm just at the starting gates of this revolving door of hunger. I have to now double recipes so my food budget has changed significantly.
My Plan to Save:
This is going to take some time getting use to but it will help with us eating out.
Me telling my money where to go. We will budget for all the important stuff and a little fun. Cause all business and no play ends in disaster. I'm working on using a spreadsheet to keep track of everything.
I opened a high yield savings account that I can't readily take money out of plus it will yield 1.05% APY. Not a ton but way better than what my bank offers.
I spend a lot on the house throughout the year. Going into Target never helps cause what can I say I want all the pretty shiny things. I'm not going to lie and say I won't spend on the house but I will limit my spending. I have some projects I want to complete and start but overall I will take a step back from all the decorating and redecorating.
As the year progresses I might tweak some things but this is my over all plan to save. To start the savings ball rolling I'm going to do my 52 week challenge and build from there.