Step 1• Sit down and make a BUDGET• Know how much you have coming in and going out every month
Debt is Dumb• Credit card companies and banks will rip you off and feel good about it.• You’ll pay interest on purchases you made years ago.
Average Americans• Keeping up with the Jones’s doesn’t make any sense (the Jones’s are BROKE!)• Buy what you can afford. Afford = pay for.
Automobiles• Never lease – its like throwing hundred dollar bills out the window every week.• Don’t buy new – major hit when you leave the lot. 5 years later = loss of 40% of value.
Automobiles Cont.• Try to have no loan – work your way up to a nicer car.• Buy practical cars.
School Loans• Try to pay as you go – you’ll have time to work at least a part-time job.• 6 months after you graduate interest starts accumulatingon your loans.
Home Mortgage (loan)• Put at least a 20% down payment – avoids extra interest.• Payments no more than 25% of income.• 15 year instead of 30 year.• http://www.daveramsey.com/tools/mortgage-calculator/
Saving and Investing• Continuously save for future purchases. Plan ahead and pay cash when the time comes.• Start saving early for retirement 10 – 15% of your income.• http://www.daveramsey.com/tools/investing- calculator/
Summary• Make more than you spend – do it on paper before it happens (budget).• Pay cash – no loans, credit cards.• Responsible mortgages.• Save money regularly for the short term.• Invest money Regularly for the long term.
Financial Freedom• Not tied down by a job you don’t like.• Can give money away in huge amounts.• No worries or concerns about you or your family’s future.