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Dave Ramsey’s name popped up on several YouTube channels I follow, then I noticed it at the library, and not a week later a friend made reference to him during an unexpected visit. I don’t believe in coincidence, but rather see these synchronicities like bread crumbs leading me someplace I should go. For that reason, I started to look into Dave Ramsey and his message for obtaining financial security.

Turns out, he’s been active for many years and has a large following. He hosts a radio show, website and YouTube channel, all of which were inspired by his experience of being a young successful real estate investor who suddenly lost his wealth when his primary lender was purchased by a larger bank that had no personal relationship with him.   That bank called in his loans and since he was unable to offload the properties quickly, it started him in a downward spiral.

Today he offers a variety of services for personal money management, and trains others to be financial coaches. I’m hooked, and find myself watching his old videos on YouTube. I listen to these during my commute and when cleaning the house. He is candid and offers common sense answers that appeal to my judgement.

Like many successful influencers, he’s developed a system that is the cornerstone for his advice. This is the general process that he advises and which has helped thousands of his followers become debt free. He calls them his Baby Steps, and I outline them below.

  1. Create a $1000 Emergency Fund
  2. Pay off all Debt but the House – Pay off lowest balances first and then snowball the money that went into the low balance debts toward the next lowest debt, etc.
  3. Save 3-6 Months’ Worth of Expenses
  4. Invest 15% of Household Income into Retirement
  5. College Funding for Children
  6. Pay off Home Early
  7. Build Wealth and Give Back

Money management and budgeting have been interests of mine since we went upside down with our first home, and my family has made strides toward financial wellbeing. However, we didn’t use a system like Ramsey’s Baby Steps. Instead we did what seemed right at the time and, pretty much, winged it.

I wanted to identify which Baby Step my husband and I are on, but this is difficult because we’ve done a sort of shuffled version of it. Instead I figured it would be interesting to compare the Baby Steps system with what we have done so far and our expected next steps. So here are the Edel version of the baby steps.

  1. Begin Giving Back – Before I even understood what financial wellbeing was, I started charitable giving. I began by giving a hundred dollars annually to a couple non-profits in my home town, and by sponsoring a little Ethiopian girl’s education for only $40 a month. She’s not so little anymore, she’s nearly graduated secondary school and last I heard, she wants to be a nurse. 😊
  2. Create a $1000 Emergency Fund
  3. Pay off Credit Cards & Small Loans – First we paid off any debts that were under $1000, then we tackled them in order of highest to lowest interest rates
  4. Save 3-6 Months’ worth of Expenses – I built this up before paying off all of my student loans for two reasons. First, there was a lot of reorganizations at my work and I thought it was important to have the additional security. Second, my student loan debt was huge and felt insurmountable at the time
  5. Pay off Student Loans – Took years and an unexpected windfall
  6. Invest 15% Household Income into Retirement – We did the minimum for workplace matching right off the bat, and increased by a percentage every year after that until we hit 15%. Once the car is paid off, we’ll max out our annual retirement contributions
  7. Pay Off Car – This is the step we’re currently on
  8. College Funding for Children
  9. Pay off Home Early
  10. Build Wealth

The two biggest differences is that I made charitable giving a priority from the get-go. Also I broke out my debt into more categories than mortgage and non-mortgage debt. I differentiated my debt based on size (similar to Ramsey’s snowball method), but also on interest and whether or not the debt was collateralized.  I also peppered in security items like increased savings and retirement investments before the debt is fully paid off.

As for the charitable giving, I simply could not imagine giving nothing until I was in the “building wealth” phase. I truly believe that giving back should be one of the first steps (maybe not the first, but at least in top 3) because it’s an affirmation that you feel abundant and that you have more than enough to share. It becomes a message to yourself and the universe that you’re a good steward of money.

I’m still fairly new to Dave Ramsey, so maybe I misunderstand his position on charitable giving.  If that’s the case and there is a Ramsey follower reading this, please let us know.  Either way, I admit that I am inspired by his Baby Steps and have every intention of moving forward in a Ramsey approved manner!


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