I have been a devoted Dave Ramsey fan for over two years now, when I was first became exposed to him. At the church I was last at, we made a big deal out of Dave Ramsey’s Financial Peace University (FPU) and dozens of people completed the class and for many it was really life-changing. When doing pre-marital counseling, I always made Dave Ramsey’s book required reading.
Personally, I have been following Ramsey’s plan the last two years. While I have had some serious financial set-backs in the past year (lost a job, income cut to a third of what I was making, back to school, rent tripled, etc etc) I have managed to stay on the plan — though at a slower pace than I hoped for.
The basics of Dave Ramsey’s plan to financial freedom is to follow his 7 Baby Steps:
- Save $1000 for a Basic Emergency Fund
- Eliminate all debt (except the house) using the Debt Snowball
- Fully fund a 3-6 month Emergency Fund
- Invest 15% of your income into Roth IRA’s and pre-tax Retirement
- College Funding for Children
- Pay Off Home Early
- Build Wealth & Give Generously
So here is the update on my Dave Ramsey plan:
- I am now DEBT FREE (Step 2) (with the exception of Student Loans). I have paid off my car, all my credit card debt, my undergrad student loans, and other small miscellaneous debts. (I completed Step 1 within 30 days of starting the plan). The DEBT SNOWBALL really works! And now… NO MORE CREDIT CARD DEBT EVER.
- I also have completed my Step 3: Emergency Fund.
- Given my tenuous financial situation as a full-time student with part-time employment, I have decided to build up my cash reserves now, before tackling my student loans from seminary and now culinary school. I think Dave Ramsey would approve of that move.
- Since I have no children (currently), nor do I own a home, I can tackle my student loans in place of steps #5 & #6.
Being done with credit card debt is a great feeling! And being (almost) completely DEBT FREE feels even better!