Dave Ramsey, eat your heart out

Well, I just checked out Dave Ramsey’s web site again for the first time in a few months, and again, I really liked most of its messages. It certainly has me back in high gear! However I have had to modify his `baby steps’ a bit according to my own goals …

My plan (Dave Ramsey style):

1. $1000 in an emergency fund – this baby step is done, baby!

2. Pay of all debt a la `debt snowball’  – have this in process, with final and largest debt (car) being paid off at a rapid rate, hopefully by early next year.

3. Save up for 5% home deposit – This is not in Dave’s Baby Steps, but since these appear to be aimed at people who already have a home, I am going to include it. This will take at least the next 15 months (at least), by which time I should be earning some moolah!

4. Save 3 to 6 months of expenses – this will take a few years, I’m sure, but will get easier when I start working full-time. We will definitely buy a home well within our means in order to get these steps happening faster. I am excited at the prospect of having money `lying around’. I LOVE having even $1000 in my EF at the moment …

5. Invest 15% of income – not sure about this one, as I’d probably want to start paying a little extra off my home loan first or at the same time. Maybe 5% extra on the home, 10% into investments?

6. College (university) funding? – not sure about this one either, as Australian university debt is owed to the government, is interest-free and relatively affordable (maximum $30,000 debt if studying in a high-earning course like medicine or law only; otherwise about $20,000). I am paying my own way, and I think my kids probably can too. This way  will be maximising family wealth in some high-interest earning way, ready to help them out if and when they really need it.

7.  Pay off home early – I like this one. This is something I will be very focused on. Though it seems such a long way away …

8. Build wealth and give – well of course I’m looking forward to this! In fact, once I reach this step I think I’ll be so pleased with myself that I’ll be adding in another element: have some fun! Well I would anyway … and only within what I can afford!

So there are my customised `baby steps’. I really like the concept of marking out your goals this way and plan to do my best to meet it.

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