Just recently I have started listening to Dave Ramsey. For those of you unfamiliar with this guy, he is a financial planner based in TN that runs a radio show. It interests me for a few reasons. First I enjoy personal finance and working on budgeting, bills and the like. Call me crazy, but I enjoy the stuff and have been figuring a lot of it out as I go along. The other reason I like his program is because he comes at debt from the perspective that it is refreshing. He despises Credit Cards and pushes saving, esp. at an early age. There are so many folks I know (including myself) that are in some sort of debt or another and not clearing this up early will help with longer term investing. Here are the simple steps he proposes:
1. Put $1,000 in the bank
2. No New Debt
3. Stop Investing (current debt is eating heavily into your investment).
4. List all your debt accounts
- Pay the minimum on everything
- But pay as much as you can on the account that you owe the least.
- Next, pay off the next lowest account
5. Save 15% in "growth" mutual funds
6. Save for your kids college.
7. Work on paying off the house.
The thing I found most refreshing is that the biggest cure to fixing debt is: contentment...
1 comment:
Good stuff! We love Dave Ramsey and follow his model for the most part. We use our Discover for everything and pay it off monthly. It takes discipline, but you can actually make money if you don't carry a balance (through the cash back bonus). Also, I'm not a huge believer in paying off the house early, I do see it as a good debt. Especially if paying on the house diverts funds from savings. Just my thoughts. :)
Hope you guys are doing well!
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