Dave Ramsey’s motto: “If you will live like no one else, later you can LIVE like no one else!”

Ever heard of Dave Ramsey’s Total Money Makeover Baby Steps?  The purpose of his Seven Baby Steps is to help someone who wants to achieve financial freedom to focus on one step at a time so that he or she doesn’t feel overwhelmed with the big picture, not sure where to start with finances, and give up.  Here are his Baby Steps:

My husband, Kenny, and I have completed Baby Step #1.  We have been working on Baby Step #2 for 2 ½ years now.  We started out with $162,000 in debt (primarily student loans) and have paid off almost $89,000 so far.  If all goes as planned, we will be completely debt-free in August 2013!  To see a complete breakdown of our finances and how we are paying off our debt, go here: Finances.  As we have grown and learned along our financial journey, we have decided to tweak Dave Ramsey’s Baby Steps some in a way that felt right to us.  Here are the steps we are following:

1. Save $1,000 in an emergency fund – Completed!
2. Pay off all debt ($162,000) – Goal: 3 ½ years altogether – done August 2013
3. Save 3 months expenses ($5,000 + $1,000 from Baby Step #1) in easily accessible account for emergencies – Goal: 1 month – done September 2013
4. Save for down-payment on house, then pay off house as soon as possible – Goal: 5 years or less – done on or before September 2018
5. Saving, Investing, Spending, Giving!  This is when the financial fun begins!  Saving for future kids’ college funds, weddings, etc., Investing for wealth-building, Spending on amazing experiences and travel, and Giving to charities and causes that are important to us.  (Note: We are Spending and Giving right now, but on a much, much smaller scale.  I also have investments from before we started paying off our debt aggressively, but again, they are nowhere near where we want our savings and investments to be eventually.)

Dave Ramsey’s Baby Steps and his Financial Peace course have been wonderful and have lead us in the direction that we are heading today, but paying off the house in order to have NO debt after we have worked so hard to finish paying off our loans makes the most sense to us.  I despise debt payments, and the thought of having house payments does not sound appealing to me.  I imagine it will feel close to the same as having to pay off our student loans.  (We also revised Dave’s debt snowball, which I will write about in another blog post later this month on how we are paying down our debt.)

I am writing about our finances with full disclosure in hope that I can help to motivate and inspire others to get rid of their debt so that they can live a life they love with complete financial freedom.  If you have any questions, please don’t hesitate to ask!  As you can see, I am an open book.  You can leave them in the comments below or email me at heallovebe@gmail.com.