Dave Ramsey’s 7 Baby Steps
One of my New Years resolution’s for 2016 was to start reading more. I use to love reading but as time went by I just stopped . Maybe, it’s because I know as soon as I pick up a book to read my children will suddenly need help with everything! I don’t remember the last book I read until recently. I just finished reading The Total Money Makeover by Dave Ramsey. On Christmas Eve I received Dave Ramsey’s starter bundle which included two books (The total Money Makeover and The Complete Guide to Money) deluxe envelope system, and dumping debt DVD. I started reading The Total Money Makeover Christmas night and just finished this week. I know my New Years resolution isn’t going too good. My intention was to start Dave Ramsey’s 7 baby steps to becoming debt free in January. It is now June and I have yet to start.
In The Total Money Makeover Dave talks about his struggles with debt and overcoming it. He makes it very clear that this is not a get rich quick book ,so if that is what you are looking for this is not the book! He introduces his Total Money Makeover Challenge in 7 baby steps.
- 1,000 In Emergency Fund which is only to be used for Emergencies only! Car breaking down, medical reason, if your stuck in a bind and see no other way out then you would use this. Also hide it somewhere you won’t see it day-to-day.
- Start Debt Snowball make a list of all your debt(expect home) and pay it off by paying the smallest to largest.
- 3 to 6 Months of Expenses in Savings If you were to lose your job then you will have this to help pay your expenses until you find another job.
- Invest 15 Percent of Your Income in Retirement which is before-tax gross income annually toward retirement.
- Save for College for your kids. Tuition is steady on a rise. Dave suggests funding the first step of college with an ESA( Educational Savings Account. Funded in a educational IRA. This is the part of the book he lost me at! It has a lot of math in it and me and math do not mix well!
- Pay Off Your Home Mortgage which is pretty self-explanatory. Since you will have no debt by this time you will have that extra money to put towards paying off your mortgage.
- Build Wealth now its time to Invest your money and help those less fortunate
So there you have it Dave Ramsey’s 7 baby steps to financial freedom. Easy as pie right!!?? As, we all look down at our pile of debt thinking hmm this will never work. Dave is very adamant about not financing or borrowing from anyone. This includes not financing vehicles he suggests that you should buy a cash car. I believe that this system works but you have to be very determined and disciplined. I plan on starting on the 7 baby steps but tweaking it a little. Which Dave Ramsey would not agree on lol.
With everything in life we don’t always get it on the first try but eventually we do. So eventually one day I will be screaming to the top of my lungs “hey Dave Ramsey we’re debt-free!!!”I enjoyed this book and look forward to reading The Complete Guide To Money.