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Friday, February 29, 2008

"THE TOTAL MONEY MAKEOVER"


Last night, our book group met to discuss this book by Dave Ramsey. The feedback from the women who actually read it was mostly really positive and enthusiastic in regards to the Money Makeover Plan. Dave Ramsey’s plan consists of 7 Baby Steps.

Without going into details, the 7 baby steps to attaining financial peace are:

  1. Save $1000 in an Emergency Fund
  2. Pay off Debt using Debt Snowball
  3. Grow Emergency Fund to cover 3 to 6 months’ of expenses
  4. Invest 15% of your income for retirement
  5. Begin college savings
  6. Pay off home early
  7. Grow wealth and give

You start at Baby Step 1 and don’t move to the next step until you have solidly completed the current step and so on.

HunnyPot and I are currently on Baby Step 4!! WAHOO! (Although, I guess it might be considered cheating since we have had an Emergency Fund for years and haven’t had debt for years. But still!) So nice to be closer to the “pay off home early” step.

BTW... When interest rates dropped a couple weeks ago, we refinanced our home to a 15-year fixed mortgage at 5.125%. FIFTEEN YEARS! Even if we only make the minimum payments, we will have the house paid off before our first child is 16. Of course, we’ll pay it off sooner than that, but hey! Isn’t that exciting!!!!

Oh, so anyway… I found a group of people online who are using the 7 Baby Steps. I wondered if any of you (who I know for realz) are following that plan. Let me know! If you aren’t one of those folks, what are your plans or strategies to be debt free and financially at ease?

3 comments:

Kristen N said...

Sounds like a great book. I agree with him (at least as you've portrayed his ideas). Congrats on your Baby Steps! There's a handy pamphlet called "One for the Money" that also gives very useful financial principles for families. I think it gives even baby-er steps that help achieve each of the 7 you listed. Ben and I made it a goal to live by it when we were first married. So far so good!

petullant said...

I'm doing this! I've found that mvelopes.com is really helpful in helping me budget too (since then I don't have to nag the boy to tell me every single purchase he's making since with mvelopes it just shows up). To be honest though because health has always been an issue for me and bad health has led to unemployment followed by being homeless and destitute, I find myself trying to do #2 and #3 concurrently. I will get #2 (one student loan left to go!) done by the end of the year and I should have 2 months of expenses saved up by then too. Hopefully. Fingers crossed.

Adhis said...

Pet, I'm so excited for you to get that student loan paid off! That's fantastic!

And you're going to love having an emergency fund!

Alright, that's enough exclamation points for today.