not your ordinary princess: financial freedom

Friday, February 4, 2011

financial freedom

I'm ecstatic to say that I finished reading Dave Ramsey's "Total Money Makeover". It was a fantastic book and I'm really taking the message to heart.

For those of you who know me, I don't handle money very well. Think Becky Bloomwood from "Confessions of a Shopaholic" and that's about how I handle money. I can justify each and every purchase in some way that makes me feel better about spending money I shouldn't.

Ok, so maybe I'm not quite as bad as Becky. I'm fortunate enough to have a good enough head on my shoulders to have NOT gotten any credit cards. Even when the temptation to get one was great. But the problem I have is I like to spend money. I'm good at it. Whether it's my money, someone else's money, or money in my possession that belongs to someone else, I can spend it and I will. Money has always burned a whole in my pocket.

BUT no more! I've decided to take on the "Total Money Makeover" and live like no one else so that later I can live like no one else. If you haven't read this book, you should. Even if you are "good" with money, you should read this book. It will help you build wealth so that you can have financial freedom and security for the rest of your life.

One of my new year's resolutions was to be more financially responsible. I want to pay all of my bills on time so that I don't worry about money the way I used to. Well according to Dave, the first step is to get current on all of my bills.

This is going to be rough because there is one payment I'm two months behind on and another payment I'm one month behind on. But I am determined to be caught up on ALL of my bills by the end of the month. After I get caught up, I can start on Baby Step 1.

Baby Step 1 is to start an emergency fund of $500. (Well, $1,000 if you make more than $20,000 a year - which I don't.) I plan to try to start that a LITTLE bit this month, but I should really have it by the end of March.

After that, you start the Debt Snowball. Since I'm young, I don't have a lot of debt. All of my debt is to family members or in student loans. Today I was figuring out how much I owe and I found that I actually owe about $2,300 LESS than I thought I did in student loans! That really made my day!

What you do is list all debt from smallest to largest. You make minimum payments on all but the smallest debt. You attack that smallest debt with every spare penny you can find until it is completely paid off. Once it's paid off, you use the money you were using for that debt and apply it towards the next one on your list and do the same as you did before. Every spare penny to that debt until it is paid off. Luckily for me, I don't have much so this shouldn't take me too long.

The third step is to complete your emergency fund so that you have enough to cover 3-6 months of expenses should you lose your income. I need to figure out exactly how much that will be, but it should be a few thousand dollars.

The fourth step is to start saving for retirement. You should put 15% into a retirement fund with an interest. I don't know much about investing so I'll have to talk to an expert about how to do that exactly.

The fifth step is saving for college. Whether it's for you or your kids you start putting money towards college educations. I don't have any children and I'm not entirely sure what I want to go to school for or if I want to go at all. Luckily this step is further down the road so I don't need to worry about it just yet.

The sixth step is paying off the mortgage. I don't have one of those yet, but I do want to buy a house. So this step for me will be saving for a down payment on a house. The closer I can get to 100% down the better off I will be.

The seventh and final step is to build weath. Start having fun, investing my money in secure places and start giving it to those less fortunate than me.

I can't wait to get there. I'm so excited about this because I have hope. I'm not too bad off to start with and now I have hope that by the end of 2012 (conservatively) I will be completely debt free and on my way to getting the things I want out of life.

I hope that anyone who reads this will do the same. I haven't won yet, but now I know how to play the game and I WILL win. I will be financially fit and free from debt before I'm 30.

I couldn't be happier!

lindsayallison

PS - ok, maybe I'll be happier when I actually finish, but that's not what's important right now.

2 comments:

Laura HuffFebruary 4, 2011 at 8:50 PM
LOVE IT! i am really excited about my TMM too :)
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AnonymousFebruary 6, 2011 at 12:42 PM
Me too. John and I are really working at being in better control of our money and trying to find out where it goes.
The future looks good,
Mom
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What I'm Reading...

Here is the complete honest truth: I have not read a novel in some time. I have a pile of books I want to read. Most are old titles of Karen Hawkins (What did you expect?) that have been collecting dust and diet coke cans for a couple of months.

As I bought three more books today, I realized that I need to actually read these things. It’s important for writers to spend time reading as well. You have to be caught up on what the market is trending, what readers are reading, and what is making and impact and what isn’t.

I have been so bad about this. It’s appalling really.

I used to bring a book with me to work to read during my lunch break. It was great. THEN I got a smart phone and started spending time on that during lunch instead of reading. I think this needs to stop. I really need to spend my time appropriately and reading some of these novels I keep spending money on.

So that’s the new plan then. I am going to pick up that novel I’ve started three times and keep putting down and actually finish it. I think it’s also time that I expand my favorite authors list. I need to read more than two authors on a regular basis I think.

What I'm Working On...

I have been working on lots of different things lately.

January I was working on some old projects that I don't care to spend a lot of time talking about.

As part of a writing group that was formed during last year's National Novel Writing Month, I was part of a writing challenge for the month of February. We came up with a 20K challenge. Yes, that's right. We wanted to write 20,000 words in the little month of February.

I spent most of February working on THE novel, "The Curious Tales of Lost Girls." This novel is a dark piece and it's really hard to get these words out. So the fact that this thing is about half done is quite a huge relief to me at the moment. I have a love/hate relationship with this novel at the moment.

Because it's so dark, that once I completed the 20K, I moved on. I edited/revised an old short story entitled, "Far Away." You can find the short story in its entirety posted on this blog. It's a sappy, romantic piece that I wrote a couple of years ago. I am so pleased with the final product.

After that I moved on to a "novellette" that I started a couple of years ago called "Home for the Holidays." I am happy that it's finished. I am NOT happy with the words it contains. It's currently a piece of crap and so I will let it simmer for a bit before I start the editing/revising process on that one.

Now that March has started, the group has come up with another challenge. Short stories from writing prompts! One per week! I'm currently finishing an old short story (it only had 400 words) while I let my "real" short story for this week form in my head. The first one is another sappy, romantic one about soulmates.

I haven't completely decided on what this new short story is going to be about yet. The writing prompt was "It's 1969, you're 17 and normally quiet and reserved. How did you spend your summer vacation?" I think the title is going to just be "1969". I like the simplicity of it. I know I want to write about a young woman, but I'm not sure where to go beyond that. There was so much going on that year! But what to throw her into?

Character of the Month

Kallista James has been on her own for pretty much her entire life. When Kallista was born, her parents had not been ready for a child. They had been very young and wanted to continue their partying ways, so they did.

At the age of five years old, Kallista met the girl who would become her lifelong best friend, Jade Bennett. It didn’t take long before Jade’s parents realized Kallista’s home life left something to be desired and they took her under their wing. Kallista flourished like never before in the Bennett household. She was close with the whole family, including Jade’s older brother, Chris.

When Kallista was sixteen, her parents were killed in a car accident. In a moment of intense grief, she found comfort with Chris. After sharing an intense kiss, Chris confesses his feelings for her. Before the teenagers can explore their feelings, a fight with his parents sends Chris packing, swearing never to return.

Kallista moved on. She dedicated herself to her schoolwork and to her photography. After graduation, she made a name for herself as a photographer. When she goes home for a summer vacation, she finds herself face to face Chris once more. Now all the feelings she thought she was over have resurfaced and she must find a way to deal with them and him before disaster strikes.