this wasn't in the plan |but life is still pretty good

There seems to be a lot of mention of Dave Ramsey in the personal finance blogosphere. The Tall One and I first learned of Dave Ramsey from a friend four or so years ago. The friend gave us a set of CDs to listen to, but never did. We were re-introduced two years ago when a co-worker suggested to TTO that we listen to what Dave had to say. This time we did and loved what we heard.


Dave Ramsey recommends taking control of your finances by following what he calls "baby steps". The baby steps are:

1. Set aside $1000 for an emergency fund.
2. Pay off all debt using a debt snowball.
3. Put aside enough money to cover 3-6 months of living expenses.
4. Invest for your retirement.
5. Save your children's college education.
6. Pay off home early.
7. Build wealth and give.

Following these baby steps weren't a huge shift for TTO and I. But listening to Dave Ramsey was quite inspiring. We don't follow the steps exactly, we've adjusted them to fit our own situation. Our emergency fund is more than $1000 and we built it up to where we wanted it while we paid off our non-mortgage debt. Once the emergency fund was in place, we were a bit more aggressive about paying off a car loan and some student loan debt, and those two things were quickly gone. We actually still have one student loan remaining, but the interest rate is lower than the interest rate on our savings account (though not for long!) so financially it makes sense to not pay it off right now. Currently, we're essentially working on step #3, though we have some other goals in mind as well. We are gradually upping our retirement savings right now too. Step #7 sounds wonderful and we can't wait to get there.

It's important to remember the "personal" in personal finance. There are a lot of ideas out there, so take what works for you and use it. Just keep in mind the "spend less than you earn" mindset, because really there is no arguing with that!