Chances are you’ve heard about a guy by the name of Dave Ramsey. He is a best-selling author of books like Financial Peace and Total Money Makeover, which were the inspiration behind our financial success.
Dave Ramsey developed what he calls the “Baby-Steps”. The premise behind the “Baby-Steps” is that if we try to do a little of everything like pay off debt, save for retirement, save for emergencies, etc…we get nowhere. But, if we break it down into small but intentional steps, we can accomplish our goals with much more success.
So, let me introduce you to the seven “Baby-Steps”.
#1) $1000 Emergency Fund – You need a little buffer between you and life happening.
#2) The Debt Snowball – Pay off all debt – except your mortgage – by attacking your debts one by one, smallest to largest.
#3) Fully-Funded Emergency Fund – This is three to six months of living expenses in the bank.
#4) Invest 15% of Income for Retirement – 401ks and Roth IRAs.
#5) Save for Children’s College
#6) Pay off Mortgage Early
#7) Build Wealth and GIVE!
Next week, we’ll break down the first “Baby Step” – saving $1000 and how to do it.