Goodbye Baby Step #1…

5 09 2008


Photo courtesy of chrishawn

Yes it took us MUCH MUCH longer than it should have, but today we fully funded our Emergency Fund to $1000.00!!!

This is a very huge milestone in our Total Money Makeover, and some much needed proof of progress.

I won’t get into the details of why it took us so long to get $1000 in the bank. I’ll simply say that we had some unique circumstances that prohibited us from following the textbook Baby Steps as Dave Ramsey laid them out in his book. So instead we took the slow boat to funding our EF, but continued a mini debt snowball at the same time, so we’re still on pace overall with our makeover.

The good… no GREAT news is that now we can focus on our debt 100%. (at least until an emergency crops up) And even better still, we have only 2 more months before our debt snowball gets a VERY nice infusion of an extra $500 each month after our next major loan is paid in full!

These are exciting times for us… I’ll admit the past month has been rough on us financially. Not because there was any type of lack or needs unmet in our budget, but more because we’ve felt a little lax in attacking our debt in the month of August. We took some shortcuts that were needed at times, but it was easy for us to see how it become a habit to rely on your debit card instead of cash. I still love being able to tell the ‘difference’ between how we used to operate with money and how we do now.

Let’s do a quick review of the where we are in the Baby Steps so far. We just finished Baby Step 1 which is:

$1000 in the BANK! And dont TOUCH it unless it’s a real EMERGENCY! (PS3 games, concert tickets, and cruises DONT COUNT! lol)

So now we officially enter Baby Step 2:

Pay off all debt using the debt snowball (except for the mortgage).

Hmm, while I’m at it i’ll just go ahead and list the other remaining baby steps as well. I feel it will serve as inspiration for me (and maybe even you) today.

Baby Step 3: Build up 3-6 months of living expenses in your savings account. (this is the FULL-GROWN Emergency Fund)

Baby Step 4: Invest 15% of household income into Roth IRA’s and Pre-tax retirement (401k, ect.)

Baby Step 5: Start funding your children’s college funds. (If you start now, compound interest will REALLY make it easy for you!)

Baby Step 6: Pay off the mortgage EARLY! At this point you become 100% debt free!!

Baby Step 7: Build wealth and GIVE!

Seven easy steps toward a life that very few ever get to live… and I can’t wait!

@W

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2 responses

8 09 2008
Veron Graham

I like the concept of “baby steps.” This reminds me of the what Jeff Olsen calls the “Slight Edge.” So often I am paralyzed by the overwhelming emotions involved with attempting the quantum leap. What I’m reading is giving me some ideas and inspiration. Keep it up!!

8 09 2008
Adrian Wright

Hit me with those ideas sometime! I always like the perspectives you present man.

Thanks for the support,

@W

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