LAS VEGAS (KTNV) — It feels like everything is more expensive these days, so it's more important than ever to make the most of every dollar.
However, that can be hard when dealing with a car loan or credit card payments. To help, financial expert, Dave Ramsey, is sharing his plan for living debt free.
"I was going through a divorce and I was afraid financially," said Annette Maturino.
She's like anyone else. Maturino says facing financial insecurity, and it's scary. While separating from her husband, Maturino saw nothing but a mountain of bills and questions.
"If I was going to be able to keep my house and still work and be able to move on with my life," Maturino said.
To help, she went through Financial Peace University. The program by financial expert, Dave Ramsey, teaches you how to pay off debt, save, and invest for your future.
To begin, he says to make a household budget of what's coming in and what's going out.
"I mean, any time you want to win at something, you have to lay out a game plan," Ramsey said. "It's a series of intentional acts with a plan, and that's all a budget is."
Then, create an emergency fund of at least $1,000. Ramsey says he admits this is usually the hardest step for people. It requires changing your spending habits.
"One definition of maturity is learning to delay pleasure," Ramsey said. "This ability to say, 'I'm going to put off the okay, in order to have the awesome'."
SMALLEST TO LARGEST
Next, pay off your car loan and credit cards.
"So we list the debts smallest to largest. Regardless of the interest rate, even if it's zero interest," Ramsey said. "Smallest, largest and you pay minimum payments on everything but the little one and you attack the little one with a vengeance."
As soon as it's paid off, start putting that extra money toward the next smallest balance. Then when your debts are paid, Ramsey says to start putting more of your money in savings.
Next, start investing. However, Ramsey says don't be misled by ventures like Bitcoin, NFTs or Goldbacks.
"Instead I'm going to invest steady in things that are proven long term," Ramsey said.
He says it's important to deal with proven investments and to put 15 percent of your income toward retirement.
"They systematically and steadily invest in proven investments like mutual funds on their 401k and they get their house paid off. This is what the typical millionaire looks like. It's not real sexy, but it works," Ramsey said.