7.07.2008

{ spend smart. live rich. }


I think this statement by Suze Orman really was what got ME started on the path to better money management.

"Money is a teacher. One of the primary ways you learn who you are is through your money: how you make it, spend it, share it, save it, open your hands to it or block its flow."

A lot of you have asked if Dave Ramsey was my financial guru so to speak. He isn't. However, I would definitely recommend you read his book, it will certainly inspire you to become debt free and look at money in a different way. Simple Mom also has a great overview of his 6 step plan to Debt-free Living. I have read a lot of financial books recently - some by Suze Orman, Dave Ramsey and David Bach. The books that I thought fit ME the best and really hit home with ME were:

Your Money or Your Life
Smart Women Finish Rich
Smart Couples Finish Rich
Women & Money

A lot of you asked, why do you care how much money you spend - you seem to have plenty of it? Well...Without disclosing our ENTIRE personal lives on this blog or copies of our tax returns :-), I will say we can do better. We are very lucky to have 2 successful businesses, a beautiful home that has appreciated over what we purchased it for, little debt in the grand scheme of things and money to pay the bills and travel. Having said all of that (and being very grateful for that list), we aren't very good at saving. We are however very good at traveling and Sam at the age of 4 has been to more countries than either Will or I had until we were in our 20's.

We are after 4 things with our enhanced focus on saving more and spending less.

1) Spending less on s%*t we don't need (new home furnishings when the ones we have are great, new mt. bikes when the ones we have work fine, etc) and using that money for other enjoyments and pleasure - mainly travel. Finding that balance between saving for the future & having great LIFE experiences (now, not later) is a goal of ours.

2) Spending less in order to save more for the future. We don't want to work until we are 65. Retiring early doesn't just happen magically and since neither of us have a trust fund to retire on, we need to SAVE for this grand early retirement plan of ours.

3) Spending less in order to have less stuff - Less stuff to deal with, take care of, put away, etc. After spending the last 10 years bringing MORE stuff into our lives (cars, bikes, trailers, books, furniture, kitchen appliances, art, paintings, etc.) we want to spend the next 10 downsizing. We are on a mission to de-clutter and part with anything that isn't useful or wanted in our home.

4) And last, but not least, to teach Sam that $ does not in fact grow on trees. :-)

8 comments:

Anonymous said...

great tips & book ideas! i am still on the hold list for dave ramsey's book at the library so i'll try some of these others! thanks!
Jenna

tommysmommy said...

why don't you like dave ramseys book more than the others? just curious?

dmoms said...

i'm curious too as to why you didn't like dave ramseys book as much. I like Suze Orman and David Bach too though. I have their books as well.

Dave Ramsey's book really hit home to me in regards to debt

LobotoME said...

hi all! there are a few things i don't agree with about dave ramsey's method - but first i want to again mention that anyone that has debt or is considering taking on MORE debt SHOULD read his book.
a few things:
1) I think that debt should be paid off according to highest interest. I get the philosophy that if you pay off your lowest $ amount debt first you will be motivated to keep going but I think that debt payoff should happen according to debt that is costing you the most money. For example, if you have $8,000 car payment at 0% interest and $10,000 credit card debt at 17% interest I think you are crazy not to pay off the CC FIRST. I get that small victories keep people motivated but I personally would go after highest interest debt FIRST.
2) I think that buying a home CAN be an investment - if you have a good amt. to put down, are in a geographic area that is booming, etc...We didn't have cash to buy our home - we did have $100,000 to put down ($50K in equity built from the last house and $50K in cash). If we hadn't bought our home 7 years ago and taken out a LOAN we couldn't AFFORD to buy a home in the town we live in now. Our $300K house is now WORTH over $1,000,000 (even in this slowdown of a market). That is an INVESTMENT people - even if we do have a mortgage.
3) I also think that $1,000 emergency fund isn't going to help much in a true emergency...I would advocate 3-6 months living expenses in a savings account FIRST. So combining his step #1 & 3.
so those are just a few of the reasons that I'm not a HUGE fan. Again, I respect his work and am very glad he helps many people become debt free but his plan itself isn't the one I am following.

LobotoME said...

sorry i should make that more clear - i think that real estate should be looked at as MORE than DEBT - it can (if you are wise about it) be an investment. does that make sense?

lbryson75 said...

What advice do you have for people to get the $1000 + emergency fund right away?

Thanks,
Lisa

LobotoME said...

Hi Lisa -

I would SELL stuff right away - list stuff that you don't use or no longer need on craiglist, ebay or have a yard sale. Do it within the next few weeks. Just get rid of stuff and bring some "unexpected" cash IN.
I know a sahm mom who started waitressing 2 nights a week at a popular restaurant to get $ towards their emergency fund and start paying off debt. She brings in anywhere from $100-200 night in tips!
See what you can CUT out of your budget this coming month...?
Anyone else have any ideas for Lisa?

J :)

dmoms said...

see my post for today:

www.dmoms.blogspot.com