Most financial programs, whether it’s “Dave Ramsey’s Financial Peace University” or Ramit, from the book/blog “I Will Teach you How to Be Rich”, all look pretty much the same. The JAM Program is a little bit different in that it has this additional step for us to save for some things that go beyond retirement and 529 college plans.
If you are following the Just Ask Money program, you have gone through an intense 12-24 months of debt elimination followed by another 12-18 months building your emergency fund and rolling 10% into retirement savings. If you are like us, you will need this step just to take care of some expenses that have been put off during the previous periods.
When we reached this step last year, our cars were 11 and 9 years old with 180k and 135k miles, respectively. Instead of scrambling to find money when our cars break down (and both of them could go at any time) we proactively started to set aside 10% of our income and put it in the car fund. We set a goal of $10,000. Any additional income, gifts, and tax refunds went into this fund. When this was fully funded two months ago, we moved our 10% to the next goal. It’s a nice feeling knowing that we could buy two decent used cars if our cars go out. That’s the beauty of this step. Preparing for your future.
Are you saving for a house? There’s a step for that.
Would you like to start your own business? There’s a step for that. (Sorry. That’s annoying.)
Other ideas for Phase 2, Step 3:
Investing
Making updates to the house
Taking a nice vacation
Going back to school
You can tackle 1 to 3 goals at time in this step. Just allocate different amounts to each task based on priority.
All of these goals are noble pursuits that will increase your family’s value. Yes, even a nice vacation counts as a noble pursuit if you experience a new location. This is the step that will take your family to a new level.
What does/will your 10% personal savings goals look like?
