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?
I’m the worst when it comes to saving. These are excellent steps that I know I would definitely take!
Thanks for these tips. Sometimes it is difficult to put some money away for savings, especially when the money is in your hands already. I make arrangements with my bank to transfer a 20% of the salary I receive in my payroll account to my personal account. That way, I don’t get to “hold” the money. An automatic deposit every two weeks worked well for me.
Showing this post to my collage age son right now, great tips!
These are all great tips. I am all for saving money. With little money I make, I always make sure, I save something.
These are all great tips. I love the idea of establishing a beginner emergency fund. That would be a great starting point to build a savings plan. I am currently saving for a college fund for my child.
Great tips and suggestions. Thankfully we only have one small credit card that has a balance and we pay it off within two months. We use it for vacations and build up miles on it.
We are working on saving up the emergency fund right now! These are all such great tips. I want to work on all of them!
These are definitely some great baby steps to take to start saving. The snowball method is a great thing and something we’re working on right now.
Great advice for saving money. That is one thing people can never get enough advice on.
I and some friends used the snowball idea not too long ago. It works wonders!
Great savings tips. Saving for college was a priority for me. Now, I only have one child in college and we are breezing through. I love the idea of creating an emergency fund amounting to 3-6 months of expenses. That would be a good financial buffer should anything untoward happen.
I love this! It’s always nice to be able to save and to have a savings account too. I am loving the tips that you have here because I’ve used some of them throughout my life and they’re very effective.
Little one is so cute, so big too! These are some really great tips. I think I struggled for a while for saving but now its just natural to me to make sure our savings is always got some leverage to it!
Money problems can be very stressful and these 7 steps for getting financial peace can really be helpful. The Financial Peace University class sounds like something that can really help anyone wanting to become debt free. Thanks for sharing the information.
Our biggest challenge saving money is quite simply that we don’t make all that much money. We’re what my Mom has always called working class poor and that’s how it will likely always be.
These are all great tips! It can feel daunting to know where to start, it all feels so big. But I like the idea of starting small, making it seem like anyone can do it.
I loved reading this and its perfect timing because my husband and I are finally able to crawl out of the debt hole. We aren’t even close to being done, but we are so much closer than before. We now have some money in savings which is a huge deal for us and not stressing over money like we used to. I am book marking this because these are some really great tips.
Over time, the small things we save will become big! These are great tips. Thanks for sharing.
I am glad to say I follow most of what you have written. Unfortunately I learned a lot of these financial lessons the hard way, luckily things are much better now, and I am even a little smarter!
These are good tips. It is hard to stay ahead though, especially in our area we have high taxes. It can definitely be a struggle! I’ll have to give some of these a try!
These are great tips for saving money. When it comes to saving money, every little bit helps. It’s important to take some action at least.
I am one of the worst people I know with saving. I have a savings account, but I always forget to transfer money over!
I agree. The first step s the hardest and most difficult. Once we have that secured, everything is just going to be easy.
These sounded like helpful steps to get you on the right track. The strategies you learn through the Financial Peace University should be key!
What a great post! And it’s so important. I always try to be financially responsible because you never know what will happen.
These are some great tips to baby step forward in saving money and having financial peace. Right now we are not super in debt, but do have some stuff we want cleaned up off our credit. I have been working slowly at removing extra expenses and paying off little overdue bills first.
These are some great sounding tips for starting to save, I’m really hoping to get my saving back on track again this year.
I think it’s important to set the emergency fund and savings fund even if it makes things tight. Once you get used to the expenses, you are able to be more financially flexible.
Right now I am laid off, but will be doing these steps again once I land a job. I’m saving for multiple things. Emergency fund, sons car, then college and then for me to get on the road living an RV lifestyle
We do almost all of the steps now. The college fund is a hard one for us to do because we are just making dinner for ourselves that we do at least put some in each month.
I love this post! Saving money is just like anything else you do in your life. You take it one step at a time, and before you know it, you’ve got your savings rolling along.
These are such great tips! Saving can be so difficult. It’s a daunting task at the outset, especially when you have bills that you feel like you could pay off faster if you dumped all your money into them.
We have a pretty solid emergency fund, but haven’t added anything to it in years. We really need to put more money in there….
Thankfully, all of our kids are done with college and we’re done paying for it. It’s so nice not to have that over our heads. Now, we save mainly for retirement and vacations. We also tithe and give to different charity organizations. These are all great tips!
I’m using the snowball method! Right now I have no debt except for my student loans, which is more than a mortgage payment unfortunately..but I’m chipping away at it!
We used that method and paid off both of our cars and credit cards. It definitely works!