Taken from the title of Dave Ramsey's 13 (or 9) week course on personal finance, this subreddit seeks to promote good financial habits from Dave's teaching - including the biblical teachings.
We recognize that personal finance is 90% personal and 10% finance. In this subreddit, "debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status of choice."
We welcome questions to debt, personal finance, the FPU program, Dave's teachings, the baby-steps, and the Legacy program.
To keep the subreddit easy to use, we only allow "debt freedom" posts to occur on Fridays.
We are not experts, we don't work for Dave, and you should always check with a CPA for your local tax laws. We are not affiliated with Lampo Group, Dave Ramsey or Financial Peace University.
The Baby Steps
- Create a $1,000 emergency fund as fast as possible (If you make less than $24,000/year, it's ok to take this down to $500).
- Use the debt-snowball method to pay off your debts, smallest to largest as fast as possible.
- Create an emergency fund to cover 3 - 6 months worth of expenses (as opposed to income)
- Invest 15% of household income in Roth IRAs and pre-tax retirement funds
- College funding for your children
- Pay off off your home as fast as possible
- Build wealth, and give
Zero-based Budgeting
If you have a "regular" (i.e. monthly, bi-monthly, or bi-weekly) pay check, Dave recommends using a simple zero-based budget. In short, you start with how much is in your paycheck, and start subtracting expenses from there - give EVERY dollar a job.
Sometimes, you might have more month than money. In that case, make sure you start with what Dave calls the "Four Walls":
The Four Walls
- Food
- Utilities
- Shelter
- Transportation
Before you dive into the baby steps, before you think of sending a check to the MasterCard debt collector who's yelling at you on the phone, make sure you've got food on your table (hey - a lot of college kids survived a few years on Top Ramen and tuna), the lights and water are on, your mortgage and rent are covered and you have gas in your car to get your kids to school or you to work. Once those four basic necessities covered, then it's time to figure out what debts are getting how much money or how much is going in this year's Christmas fund.
Resources
