Baby steps all the way to Financial Freedom

Gettingmyshiztogether

Hello everyone, 

Welcome to my sparkling new diary for 2023.

I have recently re-read The Total Money Makeover by Dave Ramsey (having only read part of it earlier this year) and have decided that despite the fact that its an American Finance book, it is an actual solid plan to become debt free and financially secure, and looking at my own results thus far, my way hasn't worked out all too well 🙈

So I ve decided for 2023, I am going all in with the Dave Ramsey Baby Steps.

To stay on track I am firstly starting this diary and secondly, i will read the book once a month, every single month to keep my focus sharp.

The first Baby step is to save £1000 as a mini emergency fund. The book gives suggestions on how to get here quickly, sell things, get an extra job etc. 

So here goes nothing, outside of my minimum repayments on my debts I'll be focusing on saving £1000 in January! I'll posting here what I have done to achieve this goal. 

outoftheviciouscircle

Good luck, I think I may need to read this book myself. I hear a lot about Dave Ramsey

WinterWarrior

Oh good luck. I love Dave Ramsey and did the snowball method to pay off my debt (excluding mortgage). I always say you need to get past the Americanness of it all, but the rest is pure gold. I ignore the religious side of it (what has that got to do with the price of fish?) and personally I don’t like the preaching about combined finances, it really doesn’t/can’t work for everyone, but the sensible financial freedom side is very good. There are some fantastic clips on YouTube of his show, including some excellent tellings off for the ones who say they owe xxxxx and should they book a holiday, etc. 😁

ThisLife

Another fan of Dave Ramsey here. I did the snowball method too and built the £1000 emergency fund. I listened to his radio show on the podcast in the car during my commute. It's not as good now I don't think, as he has other presenters on with him, I preferred when it was just him. Yes, Youtube is good for clips of the best callers to the show, his reactions to some of them is hilarious But really good advice about getting out of debt. I did really well at the start and made good progress, but have drifted a bit in focus lately (hence why I'm back here and have dusted off my own diary) . I do have to say that the solid foundation I learned through reading his book about monthly budgeting and not spending on credit cards has stuck and I couldn't not work to a budget each month now. Good luck, I'll be following your progress.

Gettingmyshiztogether

Thank you everyone for your lovely, supportive comments. I appreciate it so much, I will most certainly keep you updated. I am excited to finally have a plan and to get started on it 😊 

Sarahwithlove

I think his baby steps are good but need adapting to you and your circumstances. Good idea to have the £1k emergency fund but I would focus on the debt with highest interest rate first to reduce amount of extra you are paying. It may be worth doing a SOA and listing your debts and the interest rates so we can help make suggestions

Gettingmyshiztogether

Happy New Year all!

First update of 2023; £10.73 sent to the Emergency fund. This is my account cleared out now, leaving just my gym membership to come out. I have £17 in my purse just in case.

Pay day is Friday! 

Emergency Fund £10.73/ £1000

Gettingmyshiztogether

Hey everyone,

Just a small update for you, another payment has been made into my Emergency Fund. Currently it is standing at £35.95. Just a small top up today as had a small amount of money come into my account and I am eager 🤣. I get paid on Monday from one of my jobs and so hope to make a larger contribution then. Just got to keep chipping away at it! If my calculations are right then my emergency fund should be at almost £500 by the end of the month. More if I can sell some of the many things I need to sell! 

I am so proud of myself. Rewind to August 2022 and I was living in my overdrafts (I had two; -£500 and -£1000) and i was constantly terrified of my card being declined.

I am now out of both overdrafts and have halved both of the limits. I am saving for an emergency fund now but prior to this I have been able to pay off a small loan (£400).

I feel like I have stalled a bit on the debt reduction to save the emergency fund but I will feel much more secure once it is in place. Plus this is what Dave Ramsey says to do and who am I to argue with a three time self made millionaire hey 😆

Emergency Fund £35.95/£1000

shell16

Hi There!

I have subscribed to your financial journey and wish you all the very best of luck!  I agree an emergency fund is of utmost importance and whilst you are not sending anything extra to debt yet, this will soon be reality.  Im presuming you are still paying your minimum payments on these debts?

Great news that you no longer live in the overdrafts as these can be called in at any time by the bank. How is the budget going, are you managing this?  It took me quite a few goes with mine originally but a good workable budget is also key. 

Shell x

Gettingmyshiztogether

Thank you Shell.

Yes I am still making all of the minimum payments to all of my accounts, so I can include those in my DFbyXmas2023 challenge. Won't be long pike you say and I can really start getting rid of the debts also.

I am finally doing really well with my budget, thank you for asking. It certainly is a process! It's taken me since October to finally get my budget right 😅

After I had my light bulb moment of not being able to live with the stress of not knowing how much I would earn (I have my own business which has been dramatically impacted by C**!d) and whether I could pay my bills (I always did, but was slipping down a slippery slope of using my credit card and overdraft each month to supplement me paying the bills) I took on two part time jobs. The second one I am having to quit because it is the one that pays the least and is impacting my life and business the most. I need to grow my business back up and know I could spend that time and energy to earn the same, if not more. The other part time role allows me a stable income right now, that pays my bills. It also enables me to have £100 in my purse each month. This has a huge psychological effect on me, not feeling broke all the time allows me to breathe and feel less anxious. That goes on things like birthdays, DD bus fare, YS items, school things... non school uniform etc... Anything left over from that is being put into an envelope in my desk for the summer holidays. 

Gettingmyshiztogether

Good evening! 

Payday today! The best day of the month! 🤭

I ve done my written budget, and triple checked it... £470.11 is now sat in my Emergency Savings account. With a £100 float in my current account ready to swipe it over once all of my bills have been paid. I am still learning to trust myself hence the £100 float "just in case" I ve done the maths wrong.

I am pretty sure I haven't but you never know. 

So, there is money in my current account sat there waiting for the bills plus £100, "surprise payment buffer" plus £80 "everyday-need-£1/2/3-for-school/bus-fare-emergencies" in my purse.

It's still very early days for me. Last month was the first month in, who knows how long, that I didn't use my overdraft and I still had £50 sat in my account on payday.

I am so very proud of how far I have come already, but still a long way to go yet. 

I have £529.89 to go until my target and baby step 1 is hit. I have some things that need selling so need to list those. Tax return needs doing first though! Yuk!