I’m a huge fan of Dave Ramsey and his “Baby Steps” (pdf). I love the way that he sets out seven, basic steps for debt reduction, retirement, and financial security. Personally, I think that the most important Baby Steps are the first two: Have a $1000 mini-emergency fund and then use a debt snowball to payoff your debts. But, I also realize that Dave’s plan for retirement, savings, and investing may not fit every situation. For instance, Dave suggests putting 15% of income into retirement. In 2007, I plan to put 40% of my income into retirement accounts. So, with that in mind, I was thinking about ways that I ‘crawl’ or ‘run’ between the ’steps’.

Crawling: Doing The Little Stuff

I fix my own lunch, I have a basic satellite television package, I pay per-text charges on my cell phone, not a flat fee, I look for bargains at the grocery store, keeping a grocery store price-book, and I use coupons and buy generic.

You get the picture… By looking at the small things and thinking about ’small purchases’, I accelerated my debt reduction and savings accumulation. No matter how much money I have in savings, I ALWAYS think about ways to SAVE MORE. Ever penny really does count. I am amazed that so many people make fabulous salaries but are always BROKE. Want to know why? They refuse to focus on the ‘little stuff’. There are two types of people: Those who see a penny on the ground and keep on walking and those who see a penny on the ground and pick it up. Me? I’m going to pick it up, heads or tails!

Running: Doing The Big Stuff

I am fully-funding my 403b, two Roth IRAs, and two ESAs. While I enjoy the idea of saving $10 a month doing something “frugal”, I also enjoy “paying myself first” and putting away money in my retirement accounts. I like to create big goals, reach for them, and I’m not afraid to fail. While I think that it is important to manage every dollar, it’s extremely important, to me, to fully-fund these long-term investment accounts. Why? Preparation for the future, baby.

Every dollar that I put into my 403b is like a 25% BONUS to my salary. Why? I don’t have to pay taxes on that money until I withdraw it. Every dollar I put into my Roth IRA grows TAX FREE. So, I fully-fund BOTH accounts so that I can diversify my tax exposure AND prepare for the future.

Conclusion

I know plenty of people who live very modest, even frugal lives, who never focus on funding retirement accounts or thinking (much) about their futures. It is so important to look at TODAY, but we must occasionally think about TOMORROW! Conversely, there are those ‘dreamers’ among us who are waiting for ‘their ships to come in’ and they never worry about basic, fundamentals like “spend less” or “work more”. I used to be this type of ‘dreamer’. I was always looking for that magic paycheck that was just around the corner. The truth is, we must learn to crawl, take steps, and then run. Do the little things, focus on the basic plan, and then sprint ahead when you get the chance!

I have 8300 dollars in my savings account. I have 8300 dollars in my savings account. I HAVE EIGHTY THREE HUNDRED DOLLARS IN MY SAVINGS ACCOUNT!!!!!!!

Now, this may or may not be a big deal to you, but for me, this is HUGE. Until last year, I was in debt, had no savings, and I felt anxious, every, single, day. I worried about my future, I worried about losing my job, I fretted over every expenditure, and I felt like I was going nowhere. Now… Man, EVERYTHING is different. I feel in control, confident about my future, ready to face a financial emergency, and pumped about saving more and more. Am I rich? Far, far, from it. But, I am preparing myself TO BE rich. I’m doing smart things. In fact, here are the smart things that I am doing, right now:

I have a budget.
I save money.
I don’t borrow money.
I pay my bills on time and early.
I balance my checkbook.
I am contributing to my retirement, and will increase my contributions after I have my 20K emergency fund.
I now longer worry, I plan, and take action.

That’s it. Simple, easy, practical. That’s how I like my life.

If you are overwhelmed, and you feel like there is too much info out there, or that you are too “stupid” to do anything about your finances…STOP!!! There is hope. You must learn to grasp hold of today, forget about yesterday, and plan for tomorrow. Quit borrowing money. Get out of debt. Make a plan. Enjoy the simple, everyday pleasures of life. Stop driving around in your retirement (that stupid new car you bought!!!). Think, think, think, think, think.

Far too many people float around, with no insight into their personal finances. Only YOU can make a decision to change. Only YOU can send those payments in. Only YOU can say no to that item you do not need. Only YOU can stay on budget. Balls in your court. What are YOU going to do?

ME April 2005: -11,510.22 dollars
ME May 2006: 8300 dollars
Total Change: 19,810.22
13 Months: = 1500 dollars a month! 50 dollars a day!

You can do this. You can do this. You can do this. You can do this. You can do this.

You must do this.

So, in all the hustle and bustle of maintaining the 3 sites, working, parenting my 2 kids, enjoying my marriage, and leading FPU at our church, I MISSED my 1 year anniversary here at No Credit Needed! My first post was April 6, 2005, and if you want to check out my beginning debt balances, you can click here. 11K Plus. Now, about a year later, we have no debt, 7K in savings, and 2K in our checking. So, basically, that’s a 20K Plus change in our net worth. Yay!

I want to thank all of you for visiting, reading the blog, joining the NCN Network, listening to the podcasting, typing emails, and leaving comments. You guys rock! I hope you will check out my blogroll, and visit all of the blogs that I like. (If you’d like to find your way onto my blogroll, just hit me up with a comment or an email, and I’ll gladly check out your site… No promises, but if it’s a decent site, I’ll be glad to add it.)

As for my current goals: 20K in savings by 10-10-2006 and then it is on to some serious retirement savings.

(I sent in 200 dollars this week to make a grand total of 7K in savings.)

Last thing, I’ve been able to give out a few ING Direct referrals this week, and I’d love to give out a few more! If you deposit 250 bucks or more, you get 25 bucks and I get 10. Hit me up with an email at ncnblog@gmail.com and I’ll be glad to send you a referral.

Oh yeah, check out the NCN Network page for our April Updates. You’ll be amazed!

I did not like the look of that uneven amount in my savings account, so I added another 153 dollars for an even 6100 dollars. I have saved over 30 percent of my goal. Yes!

Check out the NCN Network page for my chart. Scroll down the right-hand side for more updates and table/chart combos.