Dave Ramsey has helped millions of people get out of debt. He created this plan and wrote books because he too was once in debt. Here is his story………
By the time Dave was 26 he had a net worth of a little over a million dollars by building his real estate portfolio. Ramsey’s success soon came to an end as the Tax Reform Act of 1986 began to have a negative impact on the real estate business. One of Ramsey’s largest creditors was sold to a larger bank, which began to take a harder look at Ramsey’s borrowing habits. The bank demanded he pay $1.2 million worth of short-term notes within 90 days, forcing him to file for bankruptcy relief. His journey then began to start counseling others by using a technique he came up with that helped him get out of debt. Now he travels all over helping other be debt free by doing speaking engagements, writing books, and his live radio show where you can ask him questions.
The Total Money Makeover: A Proven Plan for Financial Fitness Book
To me Dave Ramsey is a genius and I really want to be debt free before I am 50 so I can live and enjoy my life. I was so excited when I got the chance to review The Total Money Makeover: A Proven Plan for Financial Fitness Book and the Deluxe Executive Envelope System. I read the entire book and feel determined to get started. Dave explains what you need to do by breaking down what you owe and doing a snowball effect to pay off your debt. That means taking the smallest debt and paying that off first and working your way down. By doing this, you need to not spend money and budget everything. There is where the Cash Envelope System comes into play.
Deluxe Executive Envelope System
The envelope system is designed like a wallet so you can keep track of all your money. Each envelope has a spot for a category that you can write in such as food, clothing, car, etc. On payday, you will put the budgeted cash amount in each envelope and stick with that budget. Once the money is gone it is gone. If you have any money left over, you can deposit into a savings account or carry it over with the next paycheck’s money if needed. This helps control your spending and keeps you on budget. Plus, if you are using cash and not your credit card you are likely to not overspend.
How the Envelope System Works in 5 Steps:
- Set up a zero-based budget, and know how much you should spend in all categories.
- Find some of your biggest over-spending categories, or places where the expenses vary quite a bit every month and set up an envelope for those categories.
- Every paycheck withdraw enough cash to fully fund the envelopes for your envelope system.
- Only spend what you have in the envelopes, and if you don’t have any money left , don’t spend. If you need to spend more, take it from another envelope.
- Any money that is left over, either save or put towards your debt snowball (if you have debts).
If you are ready to be debt- free be sure to pick up you Dave Ramsey The Total Money Makeover: A Proven Plan for Financial Fitness Book and the Deluxe Executive Envelope System on Amazon.
And don’t forget about the Smart Money Smart Kids Book I reviewed here by Dave Ramsey and his daughter Rachel Cruz.
Disclosure: I was given the product featured in this post to facilitate my review. All opinions are 100% mine and not influenced in any way.