My Debt Diary

Finance Book of the Month – The Total Money Makeover

As part of my journey towards becoming debt free, I am making it a priority to educate myself about money. I want to have a better understanding of handling finances, financial mindsets and many other useful topics. My favourite way of doing this is reading. This is a part of my journey that I’m particularly keen to share with you as I believe you could get a lot of value from it. Here is my finance book of the month.

Finance book of the month – The Total Money Makeover

This week I would like to begin by sharing a book I have mentioned many times before already. A lot of you may have already read this, especially if you are also on a debt free journey, but I want to share it none the less.

The Total Money Makeover by Dave Ramsey is what I would describe as the most effective and most sensible approach to debt payment. The book provides you with a straightforward method to handle your money. It is easy to read and to understand. When you are already in stressful situation, possibly even a full on panic about your finances, the last thing you need is the confusion of unfamiliar words and complicated guides.

Dave’s money makeover system is made up of several baby steps, set in a specific order, that help you handle and control your money. He begins with building your emergency fund. I spoke about this here earlier in the month. He then progresses through debt payment, further saving, preparing for retirement and so on.

The Total Money Makeover is not the sort of book you read once and forget about. You will find yourself referencing it again and again. It will be relevant even once you are in the habit of handling your money well. I have just read it for the third time myself. As the title suggests, Dave’s intention is not to help you find a quick fix for your money. The steps guide you into healthy money habits that you will keep for life.

You can find The Total Money Makeover here on Amazon. (This is an affiliate link. I receive a small commission at no extra cost to you if you choose to use it. Thank you!)

https://www.amazon.co.uk/gp/product/1595555277/ref=as_li_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=1595555277&linkCode=as2&tag=mydebtdiary-21&linkId=b5421f231e544a87201db271924def21

The Total Money Makeover by Dave Ramsey

https://www.amazon.co.uk/gp/product/1595555277/ref=as_li_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=1595555277&linkCode=as2&tag=mydebtdiary-21&linkId=b5421f231e544a87201db271924def21

The Total Money Makeover by Dave Ramsey

I absolutely encourage you to begin reading (or listening to audiobooks) as part of your debt free journey. Not only do you learn something as a result, but it also allows you some time to switch off from all the other goings on in life and just focus on the book in hand, literally.

Claire from The Money Freak reflects on her own experience of discovering Dave Ramsey and his method in her blog post here.

 

Finance Book of the Month - the total money makeover - pinterest

Debt Payment Progress – The Starting Point

This is the point where I hold my breath and lay all my cards out on the table for you to see. I find this terrifying, but it has to be done. The debt payment progress record starts here. This is my starting point:

Debt Payment Progress

With each update I share I will be keeping a debt payment progress. As I am at the beginning of my recorded journey I am currently at the 0% mark. This is difficult to admit as I have been making minimum payments for a while, however due to interest my total still remains around the same. The reality isn’t nice, but I have to start somewhere.

 

Breakdown of debt

My debt is made up of four different things: two bank loans and two credit cards. I have very recently paid off an overdraft of £500. I do also have a student loan of £9000, however I won’t be counting this for now. The debts are listed here from highest to lowest and I’ll be tackling them in the opposite order. The debt snowball is the method that I will be using. I have read up on this before, but I’ll be looking into in more detail so I can use it effectively!

Bank Loan One £7524.85 – 44% of total debt

Bank Loan Two £6003.42 – 35% of total debt

Credit Card One £2700 – 17% of total debt

Credit Card Two £586.02 – 4% of total debt

Income Streams

Whilst I am constantly jotting down notes filled with ideas for businesses and money making methods I currently only have one. I am a freelancer specialising in architectural drawing and I work from home. I make anywhere from £500 to £2000 on average per month at the moment. This fluctuates regularly due to the nature of the work.

Beyond this, I spend small amounts of time using platforms such as Prolific Academic. This method earns me a small amount each month and it is great for a small extra boost to my monthly total! You can read about prolific academic in more depth here.

A further income stream I am very keen to explore through this blog is passive income. This is an avenue I have briefly explored in the past and I would love to give it more time and consideration. The key point is that I need to diversify my income by finding further ways to make money.

Methods of Saving

Due to my terrible spending habits I do not currently have a routine for saving money, nor any goals for that matter. This needs to change and I will be working on this from day one.

If you have any thoughts, I would love to hear them!

debt payment progress - the starting point

This post may contain affiliate links.