I had heard my good friend mention his name, so I picked up the CDs and Curtis and I began listening to them in the evenings as we cleaned the kitchen. Not only was he humorous and fun to listen to, with lots of good anecdotes, but we felt he had great advice as well! We began implementing many of his suggestions into our financial dealings, and I can say that we have drastically changed the way we do our finances because of his advice. I'll be honest--it's been sometimes a challenge to be disciplined, and we've had to put off a lot of things we would have liked to purchase, but the rewards have been great.
This last month has been a very exciting month for us, as we are now COMPLETELY DEBT FREE!!!!! BOY does it feel good! No car loans, no student loans, no medical bills, no house loans...we are FREE! And we hope to stay that way! (With MAYBE the exception of purchasing a house within the next couple of years--with a substantial down payment!)
It's kinda neat too, because as we have been doing this, it's somehow gotten brought up with old college roommates and friends, and I have been surprised at how many people I come across who are also doing his method!
Copied and pasted from his website, here are Dave's seven baby steps to financial security.
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.
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.
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.
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.
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.
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.
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.
5 comments:
CONGRATULATIONS!!!!!!!!!!!! Hooray for no debts!
And thanks for posting those steps!
Yay!!!!!!! That is awesome!!!
YAY!! I love Dave!
Nice!
Yes... for the house, I am not sure what you and Curtis's goal is for the down payment. Personally, I would say have enough money to have mortgage of maximum 15 years. Probably that would be the way to do, I personally believe:)
Good work!!
WOW! That deserves a party and a huge congratulations! :D Job and I recently started looking in Dave Ramsey and really like his methods too. We are already working on Job's grad student loans and can't wait to have them be all gone! :) I bet you guys feel so free and amazing! :)
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