On the blog past Friday I provided a quick synopsis and review of The Total Money Makeover by Dave Ramsay and the 7 Baby Steps described in the book. If you haven’t already read last week’s post, I recommend you read it first before learning about my progress. We’ve been following the baby steps for almost a month now, and we have kind of fast tracked our way through them since we were already being pretty responsible.
The 7 Baby Steps
#1 – Save $1,000 Fast
We’ve had more than $1,000 saved in our emergency fund for awhile so consider this step DONE.
#2 – The Debt Snowball
We have 3 credit cards, but they are paid off every single month. ALWAYS. The only debt we have is the Jeep loan. So we took money from the house down payment fund and paid off the auto loan. Now every square inch of that beautiful 2012 Jeep Grand Cherokee Laredo 4×4 are all ours. Not gonna lie, it feels pretty baller to not only own the Jeep, but also be 100% debt free. Baby step DONE.
#3 – Finish the Emergency Fund
Our emergency fund has been in place for awhile so another baby step DONE.
#4 – Maximize Retirement Investing
Like most dummies, I didn’t save money for retirement while I was working full-time. I saved money, but it did not go into an IRA or 401K. My husband, on the other hand, is smarter than that so he has been contributed to an IRA for awhile. We also are currently putting 5% of my husband’s income towards his 401K. He’s only been with his company since May so additional benefits kick in this January aka his company contributes an additional 10% of his gross income to the 401k on top of the 5% we put. And once I start contributing more to this household than clean babies and crockpot meals, I will put 15% of my income into a retirement vehicle. Baby step #4 DONE.
#5 – Save for College
My husband’s parents started a college fund for each baby when they were born. Like the awesome grandparents they are, they have been putting money into each money. My husband and I have not. The in-laws are stopping by on the way up to MO for the holidays next week so my goal is to begin our automatic transfers into the account by the time they’re visiting. So Hooper Senior (Senior, get it, because you’re old) if I haven’t set up the deposits by the time you’re here, please hold me accountable. Baby step not done 😦
#6 – Pay Off the Home Mortgage
Now let’s not get ahead of ourselves. We’re still stuck on baby #5 and I don’t even have a down payment saved. But when the time comes to purchase a home, you better believe we’ll be paying well above the minimum monthly payment on a 15 year (not 30 year) mortgage. We’ll potentially be able to put almost 70% of our income each month towards our mortgage to own our home completely in 5 years. Oops, look who got ahead of herself. Baby step not even close to being done 😦
#7 – Build Wealth
While we are years and years away from this step, I know it is in my future. And that is what keeps me motivated. It is not about all the stuff I will be able to purchase without guilt, it’s about the security I will feel when I have completed my total money makeover. It’s about how you can work your butt off doing a job you like for the early part of your adulthood to then have the option to do something you really love for the rest of your life.
image via Jenny Collier
Isn’t that cutest image! I found it on Pinterest via Jenny Collier’s blog. She has a bunch of other free printables, so definitely check her out!
I’ve enjoyed sharing our progress with y’all, and I hope it’s been a bit motivation. All things considered we’re more than halfway through the steps by just being the (semi) responsible adults we already were. Which makes the rest of the process even more excited as it seems like it will be relatively painless. Which is how I really think of personal finance in the first place. A little bit of pain, a lot of gain.
Have you read The Total Money Makeover and started your baby steps? I’d love to hear about your journey! Thanks for reading!