Dave
Ramsey's Baby Steps |
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Baby
Step 1: $1,000 Beginner Emergency
Fund |
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Put a little starter
emergency fund of $1,000 in the bank, and don't |
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touch that money except
for emergencies. This money
should |
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be liquid and available
for emergencies a regular savings |
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account will do. |
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Baby
Step 2: Get Out of Debt Using the
Debt Snowball |
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List your debts (not
including your home mortgage) from smallest |
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to largest by balance,
and then attack the smallest one.
Throw |
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every dollar you can at
it and get it out of your life as quickly as |
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possible. Paying minimum on all Debt's except
the lowest. |
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Baby
Step 3: Fully Funded Emergency
Fund |
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Go back to your starter
emergencey fund and and beef it up to a |
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fully funded emergency
fund. This should be three to six
months |
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of expences. |
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Baby
Step 4: Save 15% of Your Income
for Retirement |
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This is when you will
start to invest for your Future.
Put 15% of your |
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income into a Retirement
account. This in order should be
a Match |
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401k up to the match,
Roth IRA, Regular IRA and then back to the |
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401k. Other Retirement accounts would work
too if available to you. |
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Always use a Roth Account
when available. |
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Baby
Step 5: Save for Your Children's
College |
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Start a savings account
for your Childrens College. Using
a ESA or |
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a 529 plan. Putting the money in good stock growth
funds. |
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Baby
Step 6: Pay of the House |
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Baby steps 4, 5 and 6 all
happen at the same time. So all
money |
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available after steps 4
and 5 should be chuncked ont the |
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house. When done this will make you
completely Debt Free! |
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Baby
Step 7: Build Wealth and Give |
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Now is the time to
completely blow up your retirement |
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savings. Now it's not just about reaching your
retiremtent |
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dream; it's about
building wealth that can change your family, |
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your community, and your
legacy for generations to come. |
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