Baby Step 3, or 4, or Both?

Sunflowers - Baby Steps

When I started this blog, I sort of thought I’d be more in the personal finance genre, but, honestly, I don’t think I ever really fit that mould, and, if I had to classify my blog, I guess I’d put it in more of a lifestyle category… But only my lifestyle… not a stylish lifestyle… So maybe it really is just a personal blog… I don’t really know…

Anyway, the point being, I don’t really write about much personal finance other than my monthly financial update posts.  I do, however, read and follow loads of personal finance and FIRE (financial independence & retire early) blogs.  In the personal finance world, most people are familiar with Dave Ramsey.  While I have never actually read any of his books or attended any seminars or anything of the like, I have read lots of blog posts about his methods, and have visited his website a few times…

The other day I read a post (can’t remember where now, sorry!) about his 7 baby steps and decided to take a look at them for myself and see where I stand… So, here’s my take on our status with respect to Dave Ramsey’s steps:

  1. Baby Step 1: $1,000 cash in a beginner emergency fund – check!
  2. Baby Step 2: Use the debt snowball to pay off all your debt but the house
    (didn’t have any)
  3. Baby Step 3: A fully funded emergency fund of 3 to 6 months of expenses – in progress
    $10,000 is what we have currently in our emergency fund, but I know this would not cover us completely for 3 months based on our current spending… But I do have a goal to increase this to $15,000, but maybe I should be making it even bigger?
  4. Baby Step 4: Invest 15% of your household income into retirement – in progress
    I think our contributions so far this year work out to 5%, but, to be fair, my husband is in the progress of moving his retirement accounts, so things have been a little out of sorts lately.  I think a more typical percentage with our normal contributions is currently 8%, but I do want to increase this…
  5. Baby Step 5: Start saving for college – This isn’t totally applicable to us right now, although I suppose we could save some to help my step daughter with her university tuition, but we only have 1 year to do it since we will be graduating from high school next year!!! Craziness!!!
  6. Baby Step 6: Pay off your home early – not a priority with our current low interest rate
  7. Baby Step 7: Build wealth and give generously – I don’t really know that this is a “baby” step… but it is definitely the ultimate goal… 

So, looking at that, we are somewhere between steps 3 and 4…  For some reason I thought we would be further along in the process since I feel we are pretty financially stable, but I guess that’s just my ego talking…

Have you followed Dave Ramsey’s steps?  How far have you got?


13 thoughts on “Baby Step 3, or 4, or Both?

  1. I posted about the 7 Baby Steps awhile back after reading Ramsey’s “The Total Money Makeover”. I’ve always wanted to be debt free, but reading that book really lit a fire under my butt. We worked the steps a bit out of order, but we’re on baby step #6. If you only want a 3 month emergency fund, you should be able to do it with $10k. If the emergency fund is enacted, you’re living a pretty bare bones lifestyle so it doesn’t necessarily have to be exactly what you spend every 3 months. Are your retirement contributions automated? If so, this is the easiest way to bump it up.

    Liked by 2 people

    • That’s great that you are already on Step #6!
      Our mortgage is quite high (we live in an area of crazy high house prices), so I’d really like the emergency fund to be a little bit higher… Just so it could cover more than just the mortgage for 3 months…
      Our retirement contributions are indeed automated, but with the extra expenses that we are dealing with for our renovations right now, I’m not sure that I’d feel comfortable increasing those quite yet…


      • I totally understand. There’s probably no such thing as too much money in your emergency fund. Renovations definitely make things a bit more uncertain; I’m sure once those are completed you can revisit how to accomplish your other financial goals.

        Liked by 1 person

        • I was just reading a post today about a blogger who was laid off, and he is able to not stress and just go with the flow because of his savings… I’d like to get there… some day…


  2. Jena, my last husband and I attended a DAve Ramsey course. WE did pay off our 3 credit cards, and worked on an emergency fund. SKip forward to now. I have 3, make that 4 more CC, that I owe $1200. all together, and we are divorced. So, starting from the bottom, all over again. 😦

    Liked by 1 person

    • I agree that the jump between the steps seems to be quite large… Being in step 5-6 is a very good place to be! We give… but like you, I wouldn’t say it was “generously”…


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