My Financial Journey | Following Dave Ramsey's Baby Steps

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This past week, I listened to Total Money Makeover by Dave Ramsey. In the book, Dave goes over a set of Baby Steps to help individuals transform their financial situations. In this blog post, I go over those baby steps and how I plan to tackle each step to meet my family's financial goals.

The Baby Steps

Step 01 | Emergency Fund

Save $1000.00 to begin an emergency fund.

Step 02 | Debt Payoff

Pay off all consumer debts.

Step 03 | Build Emergency Fund

Start building your savings to 3-6 months worth of expenses.

Step 04 | Retirement Investing

Invest 15% of your earnings for retirement

Step 05 | College Savings

Set Up a college fund for the children

Step 06 | House

Pay off your mortgage early.

Step 07 | Build Wealth, Save More, and Give

Build wealth and give back to my community.

The Baby Steps that Dave Ramsey presents function as a checklist. Once one task has been completed, you would move on to the next, and if life happens and I have to restart/ revisit a step, it is encouraged to do so.

My Plan

Step 01 | Emergency Fund

Cut costs, stick to the budget, and save $1000.00 in cash/ easy access savings account.

Step 02 | Debt Payoff

Pay off debts using the Snowball Method. Pay off CC debts using the Avalanche Method.

Step 03 | Build Emergency Fund

Determine how much we spend in a month, add $500.00 to the total, and set that as the goal for a 6-month emergency fund ( ≈ $20,000).

Step 04 | Retirement Investing

Invest 15% of earnings for retirement.

Step 05 | College Savings and Retirement Savings for the Children

Open college savings accounts for the children and begin saving.

Open an IRA for the children.

Step 06 | House

Though I have yet to own a home, my goal is as follows.

• If I have yet to purchase a home, save for a 10% downpayment and pay current rent out 3-6 months.
• If I have purchased a home, work towards paying the home off in 5-8 years.

Step 07 | Build Wealth, Save More, and Give

Continue to build wealth through investing and increasing income streams. Start to donate money to charities and back into my community.