The 7 Baby Steps

One of Drew's favorite things to do is to listen to AM radio, and one of his favorite shows is the Dave Ramsey show. For those of you unfamiliar with Mr. Ramsey, he educates listeners on how to manage their money, or lack their of, and shares his get out of debt tricks. Today, Drew was listening to him while driving home from Costco and heard the 7 Baby Step tips on how to get our of debt, and came home to share them with me. Here are the 7 steps that Ramsey suggests:

1) Take $1,000 to start an emergency fund- for all the things that come up where you'll need instant cash to pay off (loss of a job, medical issues, faulty car transmission).

2) Pay off all debt using the Debt Snowball- listing your debt from smallest to greatest (excluding your house) and paying off the smallest first. then, put that money towards the next smallest until it is paid off, et. etc.

3) Turn your emergency fund into 3-6 months of expenses- never hurts to have a few months of money set aside to help out in case of job loss or something else large.

4) Invest 15% of household income into ROTH IRAs and pre-tax retirement- enough said

5) College funding for children- with having your debts paid off and a decent size emergency fund, saving for your childrens' college experience will be easy(ier).

6) Pay off your home early- they say that if you can make one extra mortgage payment a year, you can take 15 years worth of interest off your total.

7) Builkd wealth and give- investing in property or stocks and blessing others with your excess (which at this point will be HUGE).

So Drew started doing the math the instant he got home, and has since figured out how long it will take us to save the $1,000, pay off our car, increase the emergency fund, increase our retirement, and pay off our mortgage. At first it sounded crazy, but as soon as he started showing me the numbers, I realized how "easy" it will be to actually accomplish this list. I'm super excited and am so proud of my honey for figuring this out. He's always looking out for us- he's so good to me!!!

Want to know more on the 7 Baby Steps? Visit www.daveramsey.com And stay tuned, maybe we'll be sharing our excess before you know it :)