Dave Ramsey's Baby Steps | Total Money Makeover |
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- čas přidán 6. 09. 2024
- Hi guys and welcome back to my channel. I just recently finished Dave Ramsey's Total Money Makeover book and decided to film a quick video on the baby steps. Hope you enjoy!
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thank you so much for taking the time to sit down and explain these steps. With already 1 attempted fail at following the Dave Ramsey way, I am utilising my day with tons of research, a sit down with my partner when he gets home and we are going to do this again, the right way and sticking to it! Being young (21 & 26) we are always told our generations won't be able to afford their own home... I want to prove those people wrong and raise a family in a home that we own completely debt free!
Good luck!! Honestly, I use more of a modified Dave Ramsey plan. I think you just have to make it work for you and your family so don’t be discouraged if it doesn’t work out exactly like he illustrates in his books.
I became debt free using these baby steps and am currently on BBS3, you have explained this so well..
Maureen Cairney that's amazing! Congrats!! And thank you!!
Baby step 7 sounds like it will never happen in my lifetime but I can do the other 6. I wish I had started this 20 years ago.
I just wanted to say you did a wonderful job at giving the information about Dave Ramsey's book. No judgement but he can come off quite abrasive and that can really be a deterrent to some folks going forward to get the information that he has to offer. But I really appreciated the way you allowed the information to come through in such a positive way. Thank you so very much
Great summary. And by teaching others you now know it yourself even better! Also, nice handwriting 😊
Thanks!
Thanks for the summary. He has some good ideas I just don`t know if everybody can do this. It takes a lot of discipline and sacrifice. You need to have a pretty good income also in order to pay off all debts, save for an emergency fund, save for your kids college, save 15% for your retirement and pay off your house in fifteen years or less. That's a lot to do.
I liked this step break downs, I'm trying to get my finances together so I am working on saving money and paying off debt.
I dont even make a $1000 a month sometimes with my on call job so that first step is gonna take a while. My partner has more than that saved but i wanted to do it too but i guess since we live together Our income is together .if that makes sense. Im so excited! I just bought the book and it should be here tomorrow. Cant wait to start my journey. Me and my partner blow thru our money on eating out and buying small miscellaneous stuff that racks up. We have a lot of left over money after paying bills, but technically we are broke cause we are about $16k in debt from medical bills and ect. Dollar store is a huge no no for me. Ill go in there and spend 40+ on stuff i dont need lol this video helped
I try to take the steps with a grain of salt. Obviously everyone’s situation is different, so you sometimes have to adjust his standards to make them work for you and your family. In your case, $1,000 combined probably makes the most sense! Good luck with your journey! Keep me updated! 😊
Do side hustle
Dave has strong feelings that if you're not married you don't do this together. Just for that possibility of breaking up and having animosity over each other.
kt_rvs Yeah, the income and savings are not savings you have if your partner is going to have all of the money in their account in the event of a break up. Obviously no-one plans to break up but be mindful that you can survive and have enough to get yourself set up in another home should you separate.
Roo but breakups happen more than lifetime commitments.
Took me about 6 years to pay off 48,000. New car student loans and debt just to be able to be a stay at home mom 😅😅😅. Now my husband has a car to payoff and and moving on to step 3 🙌🏻. House mortgage will be a big one but not impossible. We try to stay home as much as possible to avoid spending but we don’t deprive ourselves if we want something. 💜 stay strong if you’re in the same boat
Thanks for explaining Step 3...I am on step 2...just started... I plan to keep my 401k match until my credit cards are paid off then review everything in 2019 and go from there.
Nice simple quick explanation of Dave's steps.
Thank you for this! I’m halfway thru the audio book and it’s nice to have the steps broken down. Subscribed!
I pay my highest debts first to minimize money lost to interest. Then I pick off the small ones which feel like nothing.
I can totally understand that! It seems to logically make sense. However, that's not the way Dave Ramsey suggests you pay off debt. But seriously do what works for you.
Not the fastest route but of course it will work if you stay with it which is the most important step.
This is the fastest and best way. Dave does it the other way because most people need immediate satisfaction. If only they would look at the bottom line they would do it your way.
What do you mean your highest debt first? The biggest balance doesnt always have the highest interest rate.
I dont think you understand debt very well Jake.
I’m on baby step 6 right now. I used all the stimulus money on paying off debt and investing.
God bless Sara wish u all the best keep the good work! Greetings.
Well Done!!! 😍🤗😇You Explained It So Well
I'm already check to check but seeking a second. Its gonna take a lot more than a month for some like myself. I haven't read the book yet. Thanks for your detailed breakdown.
Glad I could help 😊
For college, look at sending your kids to Europe or some other country where college is cheap, or free!
Definitely something to look into!
I've never done it, but let's face the facts ; no one is coming to our or our children's rescue. We have to make our own way. And if that includes leaving the country for our education, or even medical needs, so be it! We didn't make the system but we do have to live with it! Best of luck to you!
James O'Quinn you’re right... no one is going to come to their rescue. I hope by preparing now, we can pay for Maci’a education if that’s what she chooses. Saving for college is a huge baby step that Dave Ramsey talks about.
It's not one that is on my radar, but I would like to see the overseas college thing take off. To encourage colleges to step off their students throats. I'm starting my program on Jan 1st!
Uni is never free. Someone has to foot the bill
Hi, I like how you explained the steps. Also, Id like to know which notebook you have. I really like how the pages are set up.
I’m so glad 😊 it’s an Erin Condren notebook. If you use the links in my description it’ll take you to it!
Also, if you haven’t already created an account with Erin Condren, if you use my referral code you can get $10 off your first purchase!!
Love this video❤❤❤thank you!!
Thank you for sharing this. It was very helpful!
Great marketing on Dave’s part calling these “baby steps”....lol
Hi I have a question. How do we save 1,000 in a month if we only make 1900 a month
Yeah I'm stumped there too.
Saving $1,000 in a month is just a guideline. The most important part is not when you do it, it’s that you save the $1,000.
You don't have to do it in a month. You have to save that amount up before you begin paying off your debts, it could take you 6 months but the faster you get the 1000 saved then you can move on to debt repayment.
Dave also recommends a smaller amount for people who can't save 1000 in a month. I believe it is 500 dollars.
Get intense and intentional with your money. Give up any frivolous spending and hunker down and save.
Just wondering why does it make more sense to pay the debt before building a 3 month emergency saving? I’ve been working on getting mine to 3 months before going full force on my loans, but now that I’m watching this I’m unsure
Sara, I’m not sure if you use debit cards or even credit cards, but what bank do you recommend for a good credit card? What bank do you recommend for savings account for emergency funds? The reason I ask is bc I currently have Wells Fargo and they charge fees on my savings account. What would a liquid savings account be? New to all this budget stuff
from what I heard on a podcast, capital 1 savings account actually gives you 2%. you should check them out. Wells Fargo is kindda crap cause i use them as well.
AR yah and especially with their whole fraud scandal I don’t trust them anymore.
Every time I try to do baby step 1, I have to use it to pay a bill or buy food😢
That's tough! Is there anyway to either increase your income or decrease expenses? I know it's easier said than done but doing one or the other may help?
Sara Marie I am 52 and have arthritis that's getting worse. I've always worked 2 jobs but I can't anymore. I have minimal expenses. It's just rents are high. I don't even have cable. I cook I don't go out and eat. Once I pay the rent, utilities, car insurance, cellphone and buy groceries it's more going out than coming in. Taxes and benefits take a chunk of my pay checks. I need to figure out a part time job I can do at home. I sell Avon but I don't really make much. I'm up for any ideas
Maybe you can find some things around the house to sell to make the extra money.
I followed this for three years. Gave up on the $1,000 idea. I needed at least $2,000. Car head gaskets over 1,500, heater 2,000, dead tree in yard 1,100, etc. This is real life, I prefer to save up the 3-6 month expense first, then pay down debt. Removes a lot of stress.
Thats where resistence and power of will come through if you keep doing that your never going to save up anything or pay off anything you have to juat not use it find the money somewhere else i know its tough but thats how it is.
This is amazing!
Great summary, Sara!
Thank you for this video! New subscriber ❤️
Thanks for uploading this
For step 5, what if you are not in school anymore or will contribute to your kids college?
Yes
Very helpful.Best explanation of Steps. Thanks 🎉👏👍🎉😁 New Sub
Thanks for sharing this 👍greetings from Denmark
What if our only debt is the house loan?
Then you would skip to Baby Step 3 :)
Congratulations.
Then your in awesome shape congrats 👏
Great video. Thanks!
My husband and I are starting this.
That’s awesome!!
Where is the best place to save emergency fund ... cash in the house or check or saving accounts?
It’s a personal preference I think. For me, a savings account is what we choose. But I’m pretty sure Dave mentioned his wife prefers it in their home in the safe.
Darawan Buayan Credit union savings or money market
Thanks for explaining this in details with the rules i have a question can you do baby step 2 and 3 at the same time
Pamela Jones no....stick to the plan please. You won't be disappointed.
According to Dave, you should finish step 2 before starting step 3. However, you have to do what is best for you and your family. Personally I don't feel okay with only $1,000 as an emergency fund. But again, it's whatever works best for you.
How do you begin to sell your vehicle as Dave recommends if you're upside down? I tried look at certain website and have no clue where to begin.
That’s a good question. I’m honestly not sure but maybe another viewer does?
I can’t find the video but he made it very simple. If you bought a car for 30k and you owe 12k but it’s only worth 8k. You sell it and be only in debt for the 4K rather then 12k in debt. Once upside down in equity there’s really no quick fix to my understanding but that sounds a lot more manageable. It’s just making the best out of a bad situation. Which is why he stresses so much to never get s brand new car
So you would have to barrow the 4K in this instance to pay off the vehicle but again that’s only paying 4K rather than 12k ... you May even barrow 6k to buy you a 2k beater car like he says and now you only half the debt
Hey. Once you pay off your cards do you close them or do you let the company close your account?
I've done both in the past. I'm not sure what Dave would recommend but you would probably be saver closing it so you don't lose it or acquire miscellaneous charges.
Charmagne Hoskins you cut off the card.im will Dave Ramsey follower.
They generally won't close the account unless you were behind or in default when you paid them off. If you never plan on having credit again close them. If you choose to leave them open you can always freeze your credit cards so no one can use your credit. I have not had credit cards for 5 years sometimes it is tough. My most difficult time was renting a vehicle with a debit card. I am tempted to get a card for such circumstances in the future however after living without credit for so long I can't think of anything I would put on a credit card.
Close the account, cut up the card, and praise sweet baby Jesus you don't ever have to pay those interest rates again 😉
If you close accounts that don't hurt your credit score? If they open but you don't use that shows you have credit. Does closed mean you have no credit. No credit is bad as negative credit.
Where did you purchase the spiral notebook?
Seriously would like to know.
It’s from Erin Condren but I believe I got it at staples!
Great video
So I start saving for home AFTER I complete saving my 3-6months emergency fund?
Yes, that's what Dave recommends.
Naju J Yes. Something could happen and you may need the money from the emergency fund.
@@SaraMarie Hello is this extra on top of the 1000 in baby step 1??
@@aliciachavez4571 yes
thank you
Where or how do you find out about your/my debt, talking everything I don't want to leave this Earth in debt etc, need help
I knew what we owed just from keeping track of it but I’m sure you could figure it out by checking your credit score. Usually they list our outstanding debt
What does the save 3-6 month expense mean I am kinda stuck on that I need to do 6 months because I have a lot of medical issues but I am confused do I save until I have what I make in 6 months?
You would save 3 to 6 months of expenses, not what your actual 3 to 6 months of income. It’s basically how much you would need to survive for 3 to 6 months in case something happened and you were unemployed or something. Hopefully that makes sense. Dave’s book does a great job of explaining it in detail 😊
@@SaraMarie Hello I had the same question? This is after debt is paid off correct? How did you start step 3?
Once your debt free, and you’ve done your budgeting and you have your OH WOW moment when you realize all the money wasting and you’ve finally learned to live on less then what you make. You then add all your essentials which would be rent, phone bill, utilities, gas food. Times that by 3 or 6 and there you go. I’m single and have a very stable job but will be shooting for 6 months once in debt free which is next month after 8months of this!! :D So i make $3,500 a month. Minus my rent $700 + $100 utilities + $500 a month for food and gas I give myself + Cell phone $50 that’s $1,350. Once I’m debt free those are my expenses so now I will keep doing what I’m doing but putting all my leftover money into emergency fund till I have $8,100.
For baby step 3, what if you dont want to buy a house, should u still save for a downpayment?
Always good to have a large sum of cash on hand. You could also look into putting that money towards your retirement.
So like my husband gets paid weekly and they recently take out 5% from each of his paychecks for the 401k so that 15% that he suggest should that be from each time he gets paid?
Thats what i do. I take it out each time im paid before i pay for anything else.
Thats after the debt is paid off. If your paying off debt he says stop the 401k completely until debt is paid off. I now have to stop mine cause I been doing like 10% but mostly paying minimum cc payments.
Do you keep the money in the bank or somewhere else ?
We have a separate checking account for our sinking funds. For our emergency fund, I keep that in our savings account
Thx !!
Im a little 17 year old panda can anyone please tell me what a 401k is P.S i hope all the best for all, and one day you WILL pay it off its just a matter of when.
Also I thought it’s pay off the small debts first?
jasmine n yes, that’s what Dave says!
Sara Marie ok thanks! So while in bbs2 should we still save some money like 10%?
Dave suggests having a 1,000 emergency fund and throwing the remainder at debt. Hopefully that makes sense!
How do you know how much money to save for each baby step? That's what I'm confused about
In step 1, Dave says save $1,000. In step 3, it's 3-6 months of expenses which is usually around $10,000 - $20,000. In step 4, you would invest 15% of your income. After that it's all based off what you want to do. Hope that was helpful!
Sara Marie yes it is thank you!!!
👏👏
$1,000 it will take me at least 2 months
Do you do 1 step at a time or do all 7?
Kayla Altizer One at a time
Complete 1 step at a time
If I had an extra thousand dollars a month I wouldn’t need his help
Dave pushes even the poorest to save the thousand. He recommends getting a second job. I work full time and all the overtime I can get. I'm out of hours I have available and am earning (per hour) as much as I can get with my current skills. I stopped going to college because I had to work to pay bills. Sometimes this is not enough. It took me nearly a year to save the first $1,000. Then I fund out this was not enough to cover my "emergencies". Everything is an emergency until you get all your bills up to date and also have an emergency fund.
You would.
@@Hogojub it sounds like the only solution is to stay broke. Well that's stupid. When there is a will, there is a way. Find cheaper housing, move in with a relative, find a roommate or a renter, sell some of your possessions, down size a car or home. You may need to do something uncomfortable to get to where you want to be but doing nothing isn't going to get you anywhere. It's definitely possible to save money if you actually want to.
Yo like ok that only really works if you live at home with no rent
Julia Munro I honestly was thinking the same thing. These steps dont seem very reasonable or realistic for the "average" person (at least average american). 😒
Don’t contribute to my 401k? What does he suggest then?...
He suggests stopping 401K contributions while paying off debt. After you finish, he suggests contributing up to 15%
I agree with most of Dave's plan, I'm an old Larry Burkett listener (and this is the foundation of Dave's plan,Larry Burkett has passed on). If you continue to contribute to your 401K up to the match and pay off your debt at the same time, you'll have paid off your debt in the end and have free money added to your 401K. Takes longer but just like driving an expensive care v a junker, they both get you to your destination.
Very informative but the mortgage is all depending on where you live. If you decide to pay 25% of your salary for your mortgage. In Miami you will be leaving in a box.
Yunis Marrero I TOTALLY agree! In Chicago cost of living is pretty high too and you really can’t get much under a certain amount. I think Dave has these guidelines for the average person but really I would use your own judgment. Thanks for watching 😊
Yunis Marrero that’s the standard that ANY financial advisor would give you. You can’t even GET a place in LA if you can’t show proof that you earn 3 to 3.5 time the rent.
What's a 401k
A type of retirement savings
Are you saying stop putting money in your 401K?
Palondre Royster Dave Ramsey suggests to stop making 401k contributions while paying off debt. Since we will be paying off debt soon, I️ don’t plan to stop my contributions. Hope that answers your question.
Dave says to stop, however I think it is foolish to throw away free money (as in the match). I just stated a job and they won't match until next year. I'll be darn if I let free money go. I will save up to the match.
I'm honestly grateful for this video because I don't want to buy the book, but don't you feel like you kind of cheated him in a way by giving his information out for free? I mean, he has a CZcams channel where he gives out free tips and information and I've been binge watching his videos for the past few days, but whenever they mentioned baby steps, I had no clue...
Idk. I'm not trying to leave a hate comment. Just wanted to show you another perspective :)
The Baby Steps are listed for free on his website, on his tool Every Dollar, etc.
Kelsey Williams true! But I don’t think they explain it as much. Idk. I guess it’s just like Sparknotes or whatever.
I just watched 7 youtube videos by Dave Ramsey himself that explain this same thing exactly, before watching Sara's. She's just giving her perspective on it. It's all free information- hope that helps.
Helen Jane I actually binge watched a lot of his videos before watching this, too, but you’d have to really be paying attention or taking notes in order to get all the info as clearly as stated in this video.
I just left my first comment because this video helped me decide not to buy the book since this is already here haha
What about if you don’t even make $1000 in a month lol 😂
Only rich kids would go to college if you're not supposed to borrow money.