Did you enjoy the weekend? We spent several satisfying hours spiffing up the house as part of the Weekend Curating challenge, and I enjoyed hearing from many of you about the projects you tackled.
It’s hard to believe we have just two days remaining in the January Money Diet. You’ve been such a wonderful, caring, generous group of dieters, and I have SO enjoyed getting to know you.
As this spending break winds down, I encourage you to drop by your library and check out a good money book to read and reinforce the financial concepts we’ve been exploring this month.
These books have each inspired me develop better money habits:
“Your Money or Your Life” by Vicki Robin and Joe Dominguez was recommended by a former JMD participant, and it quickly became my favorite financial book. Through a series of essays and questions, the authors challenge us to delve deep into our spending habits and consider what we might be sacrificing by our lifestyle choices. Their message of money mindfulness resonated with me so much.
“The Millionaire Next Door” by Thomas J. Stanley and William D. Danko opened my eyes to the fact that most people who enjoy financial freedom generally don’t waste money trying to impress other people. They drive reliable cars, for example, and make careful spending decisions about major purchases. They build real wealth, and tend not to fritter their money away.
Finally, one of the most practical financial books I’ve read is “The Total Money Makeover” by Dave Ramsey. Dave is the founder of Financial Peace University, and I remember the first time I heard that phrase I took a deep breath and felt calmer. Financial peace…what a wonderful concept. Reading his no-nonsense advice was like having a trusted advisor take me by the shoulders and tell me exactly what I needed to do.
As you’ve probably gathered by reading this blog, I like things that are simple. That’s probably why Dave Ramsey’s 7 Baby Steps appealed to me so much. Dave recommends 7 steps to achieve financial peace, pursued in a very methodical order. With apologies to Mr. Ramsey, I have also taken the liberty of adding a few extra suggested steps to the list:
Dave Ramsey’s (and Eliza’s) Baby Steps
Eliza’s Baby Step 0.5: Start an emergency fund and build the balance to $100.
Eliza’s Baby Step 0.75: Start a separate Freedom Account to accumulate money for large annual bills. Save 1/12th of the total amount needed each month.
Dave’s Baby Step 1: Fund an emergency account with $1,000.
Eliza’s Baby Step 1.5: Start a separate savings account for a vacation fund. This is important!
Dave’s Baby Step 2: Pay off all debt using the Debt Snowball method.
Dave’s Baby Step 3: Build 3 to 6 months of expenses in savings.
Dave’s Baby Step 4: Invest 15% of household income into Roth IRAs and tax-advantaged retirement accounts.
Dave’s Baby Step 5: Save for college funding for your children.
Dave’s Baby Step 6: Pay off your house early.
Dave’s Baby Step 7: Build wealth and give.
How About You?
Do you agree with these steps? If so, which step are you currently working on? Because I bought a used car and took out a small loan in 2015, I’m simultaneously working on steps 2, 4 and 5.
Do you have any of your own steps or tips for achieving financial stability to add to the list? Do you have any other good money books to recommend for solid financial advice?
P.S. If you have completed the 5 January Money Diet Challenges, be sure to leave a comment on each of the challenge pages (see links below). On Wednesday I’ll choose one lucky winner who will receive a January Money Diet gift box with a $35 Amazon gift card, cookbooks, and an assortment of fun household goodies.
Here are links to each of the Challenge pages: