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Sunday, February 3, 2008

180 Degrees in Less than 180 Days

Simplicity in Kansas suggested in a comment yesterday, taking a look at a post about how my family has changed since we began our journey together in October. A reflection on five changes I have noticed as we work our Success Map and through the Dave Ramsey Baby Steps.

It hit me immediately as a great idea, since a lot has changed in less than 6 months. In fact, regarding finance, nearly a 180 degree turn-around. It might be easiest to explain by listing some positive advances, and contrasting them to how they were being done before.

Change #1 Bill Paying:

  • Then: We haven't had a 30-day late pay in a long time, but it was very close. Basically we paid them as they came in without a plan. This led to silly $20, $30 late charges from the cards. It also lead at times charging a payment to a credit card, or having wave after wave of Ninja Bills.
  • Now: We track every bill in MS Money including yearly ones and know exactly when we are going to pay them to maximize cash flow and eliminate late-fees.

Change #2 Spending Habits:

  • Then: It kind of used to be first come first served! If I wanted to go Golf, I checked to see which credit card had some credit and I was off. The kids would hit up their Mom for everything with little thought of earning or saving for what they wanted.
  • Now: Everyone in the house know where a bill is allocated, down to getting a Tea on the way to work. All of us are on allowances, we can spend it on what we want, but when it is gone, its gone! We try to pay with cash anything that we can...oh yeah, the Credit Cards are chopped and haven't been used in four months!

Change 3# Success Plan:

  • Then: Don't worry, we'll always make more money...It will work out. Hey, there is the sand, I am going to be over there with my head in it!
  • Now: Each person, including the kids, has a good idea to where the money is going. They know we didn't handle our finances well and we are now cleaning them up. They now know that a budget is a lifestyle, not a prison sentence to be paroled from. We all know that whatever we want...we have to save for it. A great example is with the tax return that we are getting. While questions came up about vacations, etc., when I explained that we were putting it away for taxes, everyone understood why. My oldest daughter told me to find the best interest rate, so there would be more for Christmas! (Both Girls are budding CFOs)

Change #4 Attitude Towards Money:

  • Then: When my 10 year old daughter was four, she asked for a credit card for Christmas...so she could shop whenever she wanted.
  • Now: Just last weekend she said she never wanted one because it was silly to pay extra just to get it now! Today I was with my 7-year old son at the bank getting the cash for our envelope system and he asked if we could go to McDonald's for lunch...just us two. I said sure, but reminded him that since the family wasn't all there, we each have to use our allowances to pay for our meal, because that was fair. He turned to me and said, well, how about I save this for a Bionicle instead...Good choice Son!

Change #5 Stress:

  • Then: Never knowing what would turn up next, always waiting for our next check. Everyday felt like a rainy day.
  • Now: Never is everything perfect. But the stress level around money is 10% of what it was. What stress there is really due to our understanding of what opportunities we blew by not having our stuff together...

So looking back we really have turned 180 degrees in less than 180 days. We are not perfect by a long shot but we got a budget, planned out our Success Map, are working our baby steps, built our snowball, and the light at the end of the tunnel isn't a train anymore!

If you haven't started, start. If you stopped, restart. If you are doing well, look for improvement! You can do it!


Sharon said...

This is a great exercise. It shows you just how far you've come. I especially like the idea of the kids being involved. This will help them tremendously in their start in life. I have my son who is 10 asking me about Roth IRAs, stocks, bonds...he likes to watch Suze Orman with me, especially the "Can I afford It?" section.

Sharon said...

P.S. Thanks for adding me to your blogroll! You are now on mine!

Kansas Simplicity said...

Wow...this is great and very inspiring. I appreciate your sharing and insights into how a family has to change the outcomes for the group as it takes everyone pulling into the same direction. The legacy will be the children and their attitude and use of money and how to handle that in their lives. Outstanding post and thank you for answering my inquiry!

RacerX said...

@Sharon - Thanks! I agree about the kids. One of the most important lesson you can help your child with is how to handle money and to never get wrapped up into debt chains! No problem on the link. I love your blog!

@Kansas - Nope it is I who need to thank you! It was a great idea for a post, but even more is was inspiring to think how far we've come in a fairly short period.

Thank you both for reading and commenting!

Nez said...

Hi RacerX,

Just found your site through Mrs. Micah's.

I am so impressed that you've gotten your children to see the bigger picture, something we're trying to do with our two boys.

Thanks for the inspiring story, and good luck.

Will check out your older posts.

RacerX said...

Thanks Nez..and Welcome!

Thanks for visiting and commenting!

Mrs. Micah said...

That's great! :) You all have come a long way towards financial stability and piece of mind!!

Plus, it sounds like your kids are going to have such great preparation for financial responsibility.

RacerX said...

Thats the plan! They are learning a lesson that I wish I had understood better. Not that people in my family, especially Aunt and Uncle that I lived with while going to school. Jsut need to internalize it!

Thanks as always for visiting and commenting!

Fiscal Musings said...

It's always good to hear about people turning their financial lives around. Keep it up.

RacerX said...

Thanks Fiscal! Wish I started when you did, you are doing great. But the best time to start is now if you haven't yet!

Thanks for visiting!

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