FPU

Baby step 1 - $1,000.

BABY STEP 1 - $1,000 TO START

The first step is to put away $1,000 ($500 if your income is $20,000 or less) in a savings account for emergencies. This is called the Emergency Fund! It is not to be touched, it is to be your FIRST savings priority. DO IT QUICKLY! AGAIN IT IS NOT TO BE TOUCHED: It is not for vaction or a new piece of furniture or to help pay for a car. It is however to be used if the washer or dryer dies, the refrigerator goes out to lunch; the stove stops making supper; or your car needs new tires or some other repair. But when the money is used to cover a real emergency, it must be put back. But how do we even get that first $1000 you ask? DO NOT BORROW THE MONEY! DO have a garage sale or yard sale; DO sell something you don't use or need any more; DO get a second or third job; DO whatever it takes to get the money into savings. Savings must become a priority; you must pay yourself first; Give, save, then pay bills; saving money is about emotion and contentment; Building wealth is not evil or wrong. You should save for three basic reasons: an emergency fund; purchases; wealth building. In other words save for a rainy day.

Baby step 2: Pay off all debt.

BABY STEP 2 - Pay off all debt except the house

 Debt snowball. Well first, STOP CHARGING TO THE CREDIT CARDS AND GIVING THE CREDIT CARD COMPANIES YOUR HARD EARNED MONEY!! You do not want to continue being a "slave to the borrower" (Proverbs 22:7); So cut up those credit cards and cancel them! Then work to pay them all off. First pay the smallest amount off, get a second job if necessary to pay off debt. Once the smallest amount is paid off, then take that payment, add it to the payment of the next debt; once that one is paid off, then take that payment, add it to the payment of the next debt. this is called debt snowball and before you know it, you will be out of debt, FREE FROM ANY KIND OF DEBT except your home. Do not try to pay off your mortgage at this point. That will be Baby step 6.

  

Before moving to the next step, ask this question: Are you giving back to God a portion of what He has given to you? If you are not giving God a tithe of what He has given you because your finances just can't handle it right now, consider giving an offering. Ask God to place on your heart an amount He wants you to give, and be sure to do it! God loves a cheerful giver! Do as He says and wait to see what He can do in your life, you will be blessed beyond your imagination!

 

 

Baby Step 3: 3-6 months of expenses

BABY STEP 3: Three to Six Months of Expenses in Savings

"In our lives, we all go through 'times of famine'. Whether it's a layoff, lengthy illness, large financial loss, etc., we need to be prepared and save up while we can. It will allow us to better cope during tough times and, in some cases, to survive." After Baby steps one and two have been completed, it's time to sock away three to six months of expenses in a Money Market. This account will be used to cover your four walls when a layoff occurs, or you experience a decrease either in hours worked or the wage is decreased due to these tough economic times. Determine your monthly expenses: Rent/mortgage payment, utilities + 10%, Food, Clothing, Transporation Expenses (Insurance, Maintenance, Fuel, etc). This account is NOT TO BE TOUCHED period. This emergency fund is not an investment but INSURANCE to protect you and your family in the event you lose your job, your hours are cut or your wage/salary is cut. Heard the saying "Save for a raining day"? This is it!

 

 

 

Baby Step 4: Invest in retirement.

BABY STEP 4: Invest 15% of your household income

 into Roth IRAs and pre-tax retirement plans.

 

"Building wealth is a marathon, not a sprint. Saving $100 per month, every month, from age 25 to age 65 at 12% will build to over $1,176,000." If you would like to learn more about this concept attend our next Financial Peace class in January 2012. You must start now to save for retirement.

 

"A faithful man will abound with blessings, but he who hastens to be rich will not go unpunished." Proverbs 28:20

 

You will either learn to manage money, or the lack of it will always manage you. Learning now how to live debt free and save money can change your family tree!

 

Living Debt Free

Financial Peace

Want to learn how to live in financial peace? Attend our next class in January 2012. Check for dates. Our class will be offered on Saturdays at 10 am - 12 pm. The class will cost $99, so start saving TODAY! Just twenty dollars each month for the next five months will get you there! The kit includes Dave Ramsey's book on Financial Peace, a workbook, a folder of envelopes, Audio CD's of Dave Ramsey's seminars.