Dear Dave: My husband and I have set aside a beginner’s emergency fund and are working to pay off $30,000 in credit card debt and two cars in Baby Step 2.
He would also like us to start putting money aside for some trips and some other things that we have always wanted. It makes me nervous because we’ve made so much progress over the past year in taking control of our finances, paying off debt, and living on a budget. I understand wanting something to look forward to, but I’d hate to see us slow down when we’re doing so well.
How do you feel about this?
Dear Marie : OK, so you’ve got two car payments hanging over your heads, plus a bunch of credit card debt, and your husband wants to add savings for toys and vacations? I’m sure he’s a good guy, and he’s obviously been fine with your financial overhaul so far, but I wouldn’t recommend doing it.
The reason people succeed in following my plan is because I teach common sense methods, wrapped in unbridled, scorched intensity. There is a process here. There is an idea combined with passion. And when you tune into it fully, you will move in a positive direction so quickly it will make your head spin.
You know how I say that personal finance is 80% behavior and only 20% head knowledge? It’s true. Behaviors must change. The more drastically they change, the better the results and the faster you progress. But if you don’t tune into it, you’ll fall back into the same old stuff.
It’s OK to save for a trip or buy some fun stuff in the general philosophy of life. But getting out of debt and having control of your finances should come first. Do you remember when you were a kid and you had to finish your dinner or tidy up your room before going to play? That’s what I teach. Work first, play later.
Trust me. It will pay off in the long run.
David Ramsey is a seven-time #1 national bestselling author, personal finance expert, and host of “The Ramsey Show.”