Listed below are the 7 baby steps that Dave Ramsey (America’s money guy) teaches that our family is using to achieve our long-term financial goals.
Baby step #1– Save $1,000 for a starter emergency fund.
Baby step #2– The Debt Snowball (make minimum payments on all debt. Any extra money is thrown onto the smallest debt. Once the smallest debt is done, roll all that extra money into the next debt).
Baby step #3– Save 3-6 months of expenses as a fully funded emergency fund (Since we are a one income household we are saving 6 months worth of expenses just to make us feel more secure.).
Baby step #3b– Save 10-20% for a down payment on a house.
After baby step #3 is complete, baby steps #4,5, and 6 are done all at the same time.
Baby step #4– Invest 15% of household income into retirement
Baby step #5-College funding for children
Baby step #6– Pay off home early
Baby step #7-Build wealth and give
If you are interested in learning more, I highly recommend checking out from the library, the book, The Total Money Makeover by Dave Ramsey or check out his website here