Monday, 18 May 2015

 Dave Ramsey's Baby steps in English

Baby step 1

£1000 to start an Emergency Fund

Baby step 2

Pay off all debt using the debt snowball

Baby step 3

three to six months of expenses in saving

Baby step 4

Invest 15% of income into Stocks & Shares ISA's

Baby step 5

Pay off your home early

Baby step 6

Build wealth and give

The above is 'my' baby steps guild for those of use who live in the UK. I am pretty sure that ISA's are the same as Roth IRA's - don't judge me if you think I am wrong (but please do leave a comment. I am at baby step 3 and will be for the rest of the year.

Working The Baby Steps in 2015

I have had a great week and kept to my cash budget!! 
This is a great success for me as I have been struggling with keeping to my spending plan.
Last week I cancelled my current account overdraft and for the first time in months, my current account has been in credit for the whole week. I need to do this until August and then I can send copies of my bank accounts to my potential mortgage company without being embarrassed.
I have completed baby step 1 and saved £1000 in my Emergency Fund. To this I have added a further £200 and added it to my Expenses Account as part 1 of my complete Emergency Fund
Now I'm saving for the rest of the Emergency Fund which will take some time and I don't expect to complete this until some time next year. Basing it on my income rather than expenses I estimate I will need another £5500 to cover three months of income.
This is not the first time I have gotten to Baby Step 3 but unlike the last time when I was very half heart'd about saving, I now understand just how important it is to do this - to success long term. 
Sticking to my budget will get me to my goal and this will get closer to my dreams.