The average American has over $16,000 in credit card debt, according to a recent study by Nerdwallet. That’s a lot of cold, hard cash. Once we begin to get bogged down by debt, it’s not easy to get out. Things happen. Unexpected medical bills. major house or car repairs. It’s always something. Jane Bryant Quinn once said, “The shortest period of time lies between the minute you put some money away for a rainy day and the unexpected arrival of rain.” People are always eager to give financial advice. Sometimes it’s good. Sometimes it horrible.
We have partnered with Financial Peace University to bring you this post, but I am sharing because we have taken the class and it worked for us.
When Bryan and I first married, we decided to take the Financial Peace University class by Dave Ramsey. We attended a 9-week session and learned solid financial principles that we have used for years. Have we always followed every principle? No. With two children who have rare genetic diseases, medical bills can add up quicker than income. However, whenever we have used the steps, they work. Today I’m sharing Dave’s 7 Baby Steps To Financial Peace.
7 Baby Steps To Financial Peace:
Baby Step 1: Put $1,000 cash in a beginner emergency fund. This can be the hardest step because it’s the first! Try to think of creative ways to earn $1000.
Baby Step 2: Use the debt snowball to pay off all your debt but the house. Once you get rid of other debt, you can concentrate on house payments, which are the largest source of debt for most people.
Baby Step 3: Try to prepare a fully funded emergency fund of 3 to 6 months of expenses. Sometimes disaster strikes and being prepared can help you not to go into major debt.
Baby Step 4: Invest 15% of your household income into retirement. Because none of us want to work until we die.
Baby Step 5: Try to start saving for college. Trust me, as a mom who has a son in college right now, it’s a BIG expense!
Baby Step 6: Pay off your home early. That means more money each month to invest in other things!
Baby Step 7: Build wealth and give generously. Because it feels good to help others.
Want to know all of the information included in each step to help you prepare to become debt free? Financial Peace University is now taught online! (Usually, you have to go to a church or community organization to take the course as this class employs Biblical Principles in their seven steps.) With the summer coming up and longer days, now is the perfect time to relax and watch the series at your leisure. There are 9 lessons in the series, each lasting about an hour, complete with worksheets and challenges. If you use the code DEBTFREE2017, it will make the class $99, a savings of $30! You can sign up at Financial Peace University.
As Aristotle said, “Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment, it ensures the possibility of satisfying a new desire when it arises.” I plan on taking the FPU course over the summer as a refresher, (after all, we need more college money.) I hope you will join me!
What is your biggest challenge when it comes to saving money?