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Welcome to baby step 0! There’s a full guide to Dave Ramsey here, otherwise, let’s talk step 0!
If you’re in the UK and just decided to get debt free and follow Dave Ramsey’s baby step 0 to a debt free life, congratulations!
We made the same decision as you have, and I know for certain it works! I’m going to talk you through the steps and how we did things slightly different as we’re in the UK and Dave Ramsey is traditionally very US based.
Step zero. Sounds strange? That’s because it’s not technically a step: it’s more about the preparation that’s got to take place so you can actually start on step 1.
Dave Ramsey UK baby step 0 is probably best described as the time you take to prepare yourself practically, and also mentally, for what’s going to be a super exciting but honestly, tough time ahead. There are a few things you’re going to want to have in place to give yourself the best chance of getting to baby step 4. They’re not hard, but they do take time, planing and a whole heap of commitment. So…let’s jump in!
Get up to date on ALL your bills
Start the Dave Ramsey UK baby step 0 by getting up to date on all your bills, your starting this on an even playing field. If you’re behind on your council tax (we’ve been there!) the budget you’re about to write out is not going to be a ‘true’ picture of your monthly finances, as you’ll be having to spend more of it than you should catching up, where you’re behind.
Do whatever you have to to get on top of yourself with your bills. Coming to agreements with the council, or whoever you owe money to (that’s a non credit debt) is okay when there’s no other way around it, but if you’re committing to the baby steps, you need to get current.If you’re struggling and need some extra cash to get this step complete, we’ve got tried and tested ways to bring on some extra money here, we’ve used all these ways and we know they work. Hopefully as you’re at the very start of this journey, your motivation is running high and you’ll blitz this step so you can really get stuck in. Dave Ramsey’s book, The Total Money Makeover is a surefire way to get your motivation up if you need it.
Create a budget that works for your family
Creating a budget is a huge part of Dave Ramsey baby step 0. This was so much harder than it should be, but I found this to be the single thing that helped the most throughout our journey from drowning in debt to FINALLY being able to get it out of our lives. Why did I find it so hard? Honestly? I think it was a combination of not ever having done a budget before, or at least one that was anything like realistic, and still feeling a little hesitant about the changes we needed to make.
It’s quite tough to realise that so many of the things you thought were ‘essentials’ in your life are really not. It takes a some time and adjustment to get to grips with what it’s going to take to get yo to where you want to be. Making a budget is key to not letting the changes overwhelm you. I wrote about making a family budget here, and it’s well worth spending quite some time getting this right. Cutting out everything looks great on paper, but as we discovered, if your budget is totally unrealistic it’s just not going to last and you won’t be able to stick to it.
We eventually got with the programme and made a budget for our family that included dinners out (yep, sorry Dave!), occasional new clothes and (draws breath…) a week away in the summer. And it worked.
Yep, it probably did take us a few months longer to get debt free, but we DID get there, and I suspect we may not have done if we’d not had those occasional treats to look forward to.
Audit your life
Audit your life? Yep. It’s terrifying, but completely necessary.
Many of the fee paying things in our life that I just accepted as ‘how it was’ turned out to have FREE alternatives.
Extra curricular activities we PAID for turned out to have free alternatives, (see post here about this) childcare lost it’s frankly crazy high fee when I started exchanging childcare with another mum at school.
There are SO MANY alternatives.
Even now, debt free, I am kicking myself for spending so much money needlessly because I was to lazy to question fees and look for free alternatives.
Supermarket shopping doesn’t have to cost the earth every week. I sought out Heinz baked beans and tomato ketchup. I bought branded shampoo and conditioner. If I recognised the brand, I bought it. No one noticed when I changed. Honestly, no one noticed.
We had a lease car. I really liked it for about the first month after we picked it up. Then it was just a car. As it got nearer the end of the two year lease contract, it became a car that definitely wasn’t ours. Then finally it became a car that someone came to collect and then we became carless and had to buy another one. Hmmm…..it’s not a mistake I’ll make again. Yep, I’d love another new car and yep, I’ll be paying cash for it next time! The car was gone (and not replaced!) by the time we started baby step 0 by the way :)
Well, it’s personal to each person really. Dave talks a lot about getting your partner on board. Luckily for me, my husband was always totally with me on this and is not naturally a big spender.
Maybe you have a partner that needs to get on the same page as you, and if you do, make sure you address this sooner rather than later, as the changes you’re going to make are not insignificant.
It might be easier if you’ve got older kids, to explain to them if you can what you’re doing, and more importantly, WHY you’re doing it.
If they’re at an appropriate age, get them to start making some money of their own, instead of you having to fund them.
You’ll find that every penny counts when you’re getting debt free!
Lastly, focus on your goal, and why you want to get there. Being debt free was hugely important to us as a family because it represented security. It was never about having zillions in the bank (although that’d be nice :).
What we craved was total financial security. When we felt like we were drowning in debt, well, we WERE drowning in debt, the feeling it left us with was total insecurity. Keep your WHY really close, don’t lose sight of it and hang onto it when you have a tough day.
Do people regret debt? For sure. Yet I’m pretty sure that few people ever got to the end of their debt free journey and said ‘I wish I hadn’t done that!’.
Good Luck, and please let me know how you get on, I love a good debt free story!
Our Debt Snowball App is available for download from here. It’s super a helpful way to get all your debts listed and ready for moving onto future baby steps!
If you need some Dave motivation, these two books set me on the path.