I know I usually write about education topics, but this post is a little different. I hope you’ll bear with me in the coming months as I dig into another part of my life that I’m pretty excited about: money and finance. What does this have to do with education? Nothing, and everything. I have three degrees and over 20 years of formal education and I’ve still never really been taught how to handle money well. I would imagine that many of my colleagues in education face a similar situation: a job that may not provide a large enough paycheck and student loans that take an exorbitantly large percentage of said paycheck.
I’ve never been great with money. I made friends with credit cards at an early age and it definitely wasn’t a good thing. It wasn’t until 2009 I finally started paying attention and being at least a little smarter with money. I was still far from perfect. I’d build up momentum and pay something off, then I’d fall off the wagon a bit.
Fast forward to almost 2019. I’ve got a good job, my car is paid off, but I still have student loans. In fact, I still have some of my undergrad education waiting to be paid off. That’s what happens when you don’t pay it off and then go to grad school….twice.
Dave Ramsey says something like paying off debt is only a small percentage math and a majority percentage changing behavior. The math has always been easy for me, but staying focused and making debt payoff a priority has been more difficult, particularly when the amount to pay off is large. Ramsey also advises paying off the smallest balance first to create an emotional win to keep up momentum. Unfortunately, when all you have left is big amounts, you have to create some artificial “wins.”
Because I’ve already got the math figured out, I signed up for Ramsey’s Financial Peace University program. The people that have done it swear by it. I figured it would be a good motivator, and so far it has been. None of the information has been particularly earth shattering (I’ve read some of his blogs and books as well as listened to his radio show), but there’s something about hearing the message again in a new way.
The first of Dave’s baby steps was an easy one: $1000 emergency fund in the bank. Some people laugh at this one, but I can personally vouch for the fact that having $1000 in the bank is absolutely Murphy repellent (Dave talks about Murphy’s law: “anything that can go wrong will go wrong”). When I got my first emergency fund in place all those years ago, it was as if all those little things that pop up to be paid for just sort of went away.
I’m doing the steps a bit out of order though. Dave recommends tackling debt next, but I’m focusing on the 6 months of emergency fund. Things are a bit volatile in my world right now and a job change and/or move could be in my future in the next 6-9 months. This doesn’t totally go against Ramsey’s advice though; he recommends anyone stockpile cash when they foresee a big financial event on the horizon (new baby, job loss, medical issues, etc.). Then when the event has happened and the extra cash is no longer needed, it can be put toward debt.
My goal right now is to have a 6-month emergency fund in place by June 1st. I’m actually pretty confident that I’ll be done ahead of that time (more on how I plan to do that later). For now, I’m doing my best to avoid Christmas sales and stick to my budget. It’s a tricky time of year for staying good with the budget, but I’m doing well so far.
Do you have any money goals for 2019? What gets in your way?