Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

Dave Ramsey

Posted by on Jul. 12, 2010 at 6:20 PM
  • 12 Replies

 

Baby Step 1
Baby Step 1

$1,000 to start an Emergency Fund

An emergency fund is for those unexpected events in life that you can’t plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, and the list goes on and on. It’s not a matter of if these events will happen; it’s simply a matter of when they will happen. Learn more

Baby Step 2
Baby Step 2

Pay off all debt using the Debt Snowball

List your debts, excluding the house, in order. The smallest balance should be your number one priority. Don’t worry about interest rates unless two debts have similar payoffs. If that’s the case, then list the higher interest rate debt first. Learn more

Baby Step 3
Baby Step 3

3 to 6 months of expenses in savings

Once you complete the first two baby steps, you will have built serious momentum. But don’t start throwing all your “extra” money into investments quite yet. It’s time to build your full emergency fund. Learn more

Baby Step 4
Baby Step 4

Invest 15% of household income into Roth IRAs and pre-tax retirement

When you reach this step, you’ll have no payments—except the house—and a fully funded emergency fund. Now it’s time to get serious about building wealth. Learn more

Baby Step 5
Baby Step 5

College funding for children

By this point, you should have already started Baby Step 4—investing 15% of your income—before saving for college. Whether you are saving for you or your child to go to college, you need to start now. Learn more

Baby Step 6
Baby Step 6

Pay off home early

Now it’s time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments. Learn more

Baby Step 7
Baby Step 7

Build wealth and give!

It’s time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. It's really the only way to live! Learn more

Ok, for the debate. Do you agree with this financial approach to Debt Freedom? My husband and I are on this path, but I am curious about what others think?

    Different, but not less~Temple Grandin

by on Jul. 12, 2010 at 6:20 PM
Add your quick reply below:
You must be a member to reply to this post.
Replies (1-10):
Godgaveme4
by Platinum Member on Jul. 12, 2010 at 6:57 PM

I agree with it.  I know lots of people who have gone through it and have been successful.

tornados4
by Bronze Member on Jul. 12, 2010 at 7:02 PM

we are drowning in debt right now.  My husband lost his business and had to go back to truck driving.  My mom is bringing the program over for me to watch. I think this is a good Idea. I am tired of always being broke and behind on my bills.

Godgaveme4
by Platinum Member on Jul. 12, 2010 at 7:13 PM


Quoting tornados4:

we are drowning in debt right now.  My husband lost his business and had to go back to truck driving.  My mom is bringing the program over for me to watch. I think this is a good Idea. I am tired of always being broke and behind on my bills.


good luck to you.

onthegoturbo
by Member on Jul. 12, 2010 at 7:31 PM

I've had quite a few relatives who have gone through this program and have been thinking about doing it myself.

TruthSeeker.
by Milami on Jul. 12, 2010 at 7:45 PM

 Good to know you all have heard great things about it! My in-laws did this program years ago. They own everything out-right and have zero debt. They also net over 80k a year in the clear. Because of this program they have been able to help us financial by paying off all our debt last fall and also paying for our sons very expensive therapy.

 I hope we are as successful in this endeavor.

margroc
by on Jul. 12, 2010 at 8:02 PM

Someone told me once, many years ago, that you should always pay yourself first.  I have always done so and that's how I bought my house.  When I have had to deal with unexpected job loss I had a year's salary as a safety net. 

Budgets are hard - but they are well worth the pain. This whole plan makes a lot of sense. Good luck to you :)

 

Radarma
by Ruby Member on Jul. 12, 2010 at 8:05 PM

WTH IS ALL THIS?

Gimme cliffnotes. Yo.

Radarma
by Ruby Member on Jul. 12, 2010 at 8:06 PM

Isn't Dave ramsey the Hell's kitchen dude?

In which case i want to hollah: "SHUT IT DOWN!"

ThatTXMom
by Platinum Member on Jul. 12, 2010 at 8:20 PM

We are babystepping the babysteps.  We were following the plan very well and were on our way... and then things happened.  The dh and I fell OFF the wagon.  But, just last week we discussed going back to the envelope system.  We do not have gazelle intensity, but we are determined to make it work this time.  Just remember... you HAVE TO FOLLOW THE PROCESS!

stormcris
by Christy on Jul. 12, 2010 at 9:03 PM

The only problem with that plan is number 5. It is a catch 22. Your child can lose serious funding of scholarships and grants when you do that. It is fine if you have the time to save to pay for Harvard but you may greatly limit your child. 529s and ESAs can and will crash out from under you. Do not fall into the trap of prepaid tuition because the school invests in stocks as well and when they crash the school changes its course, one recent college stated they have "no legal or moral obligation to ensure the ultimate payout". ESAs are worse because they have deadlines for use, age limits, income limits and maximum contribution limits. 

Just all around need to be careful when investing for a child's college.

Add your quick reply below:
You must be a member to reply to this post.
Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)