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Time For a Change

Breaking the Cycle of Debt

Life happens

Government shutdowns, company layoffs, union strikes, illness, family emergencies, major car repairs—these are all very real events and it is likely that you have already or will experience a few of them throughout your life. The question you should ask yourself is not will these things happen, but rather when will they happen. The next questions is “will I be okay when they happen?” Unfortunately, for the majority of families, couples, and individuals, the answer would be quick, "No."
Let's take a look at some statistics. They may surprise you:
Financial Coaching | La Croix Financial Coaching | The Average American Debt
-Approximately 66% of Americans would struggle to pay for a $1,000 EMERGENCY. -78% of people life paycheck to paycheck.
Those numbers don’t look great! It is clear to me that “normal” is broke. If we want to have good financial futures, we cannot live like everybody else. We shouldn’t have to worry every time we miss a check or have to take unpaid time off. How do we live differently? How do we plan so that we don't have to worry about money whenever something bad happens?

First, we need to decide that we are willing to sacrifice
 now so that we can live life to the fullest later. This will look different from case to case. With that being said, eventually, you should be able to cover 3 to 6 months of expenses without a check coming in. That makes the events I mentioned earlier seem a lot less scary.

What's been holding you down?

​“That’s impossible! How are we going to pay our mortgage, utilities, toiletries, car payment, credit card payment, student loan payment, furniture payment, medical bills, and still have money for food? There’s no way we can save that much!”

I hear you! That’s a lot of payments to cover. In order to reach this point, you need to change your numbers; that will take some hard work. The 3 to 6 month cushion (or emergency fund) is not designed to include your car payment, credit cards, student loans, furniture payments, etc. Why? Because the shortest path to wealth is to ditch debt. Imagine the freedom you would have if you didn’t have any payments in the world! Pretty nice picture isn’t it? What if you didn’t even have a mortgage? Imagine how generous you could be if your money wasn’t spent before the month began?

Most people can’t save 3 to 6 months of expenses because they are giving all their money away in the form of monthly debt payments! Of course, not everyone has willingly stumbled into debt. Even for the financially savvy, it only takes a few major events in close succession to derail their plans. Merely being debt-free is not a recipe for success. If someone is debt free but only has a small cash reserve, how will they pay for the water heater and the car transmission when they go out at the same time? If a similar event happens to you, as it has to many, you will likely end up right back in debt. 

Whether it is due to the 
Visa you signed up for in college, the living room set you financed, or if it is simply due to a rough run with medical bills, debt is what has been holding you down. Now, it is time to put that behind you. It's time to make a change. It's time to win! 


If you didn’t have debt payments each month, you could save, invest, and give like crazy. For many people, as long as you are investing wisely, this would put millionaire status within reach just by maxing out your Roth IRA!
Are you ready to take your finances by the reigns? If so, you'll need a straight forward plan of action. Fortunately, Dave Ramsey designed just that!

The Baby Steps

  • Baby Step 1: Save $1,000 to Start an Emergency Fund - Do whatever it takes to get this together as fast as possible. No Olive Garden or movie tickets until this is done! This will be your short-term, beginner safety net. It's not large, fancy, or meant to be around for long.
  • Baby Step 2: Pay off all debt (other than your home) using the Debt Snowball - Using the Debt Snowball means listing all of your debts (individually, not by category) from smallest to largest. Don’t worry about the interest rate. Pay minimums on all of your debts except the smallest one. Go after that smallest debt with a passion! Once it is paid off, add the amount you had been paying on the smallest debt to the minimum payment you had been paying on second debt. For instance, if you just finished paying off your smallest debt (let’s pretend it was a Home Depot card and you had been paying $100 per month) and your next debt is a private student loan on which you have been paying $200 per month, you would add the payments together to be $300 towards this second debt per month. You will also throw any extra money you can find at this debt. This pattern goes on and on. As you pay off each debt, the snowball of cash gets bigger and you can throw more and more at the next debt.
  • Baby Step 3: Save 3 to 6 months of expenses for emergencies - This is what I addressed earlier. Now, you don’t have anymore debt payments and are working on a large emergency fund. It will take A LOT to tip your financial boat now, won’t it? If you have a 6 month emergency fund (which you built rather quickly since you are freed from all your debt payments) you can pay cash for the transmission and water heater I mentioned earlier and still have room for a medical emergency or two.
  • Baby Step 4: Invest 15% of your household income into Roth IRAs and pre-tax retirement funds - As of 2019, spouses can each invest $6,000 in their IRAs! Remember to keep it Roth so your money grows tax-free. Same goes with your 401(k)! If your company offers a Roth option, take it!
  • Baby Step 5: Save for your child’s college - Since you are winning with money, you now have the opportunity to fund your kids college in a 529!
  • Baby Step 6: Pay off your home early - 7 years is the average payoff for people who follow this plan. 7 years!
  • Baby Step 7: Build wealth and give - You don’t have any debt payments—not even a mortgage. You have been investing 15% of your household income and can now invest even more! When you see someone in need, you can help without a second thought. You can support kids on the other side of the world, fund pet adoptions, or go on missions trips because you can afford to miss work. Giving up Starbucks in order to tear into your first credit card debt doesn’t seem like a waste now, does it?

Click here to purchase The Total Money Makeover for a more in-depth explanation of the Baby Steps!
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Really, you can do it!

This plan looks simple on paper and, really, the math is solid. But, we all know life throws us some crazy curve-balls. People will laugh at your plans and you will get slowed by one, two, or more major crises. Even so, you can do it. You just have to work hard and stay on track.
If you need help with your finances you can always schedule a coaching session with me. Click the ZOOM - Free Coaching Consultation link to schedule a straight-forward, non-judgmental, future-focused coaching consultation to see if this is the best program for you!


*Graphics and Baby Steps courtesy of daveramsey.com

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About Lance

Lance has attended and completed Ramsey Solutions Financial Coach Master Training. As a Ramsey Preferred Coach, it is his goal to help you reach your financial goals. Lance does not sell insurance, annuities, or any other financial product; he can truly give you unbiased advice and is here to serve you! Lance specializes in coaching couples, small businesses, and individuals.

Disclaimer: "Completion of Ramsey Solutions financial Coach Master Training does not create an employment or agency relationship with Ramsey Solutions or its affiliates; it does not constitute a license or credentials to engage in legal, tax, accounting, investment, or other professional services; nor does it constitute an endorsement or recommendation of the Coach by Dave Ramsey."
Lance A. La Croix
Lance@LaCroixFinancialCoaching.com
(612) 412-4236
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