- Baby Emergency Fund – Save $1,000 as quickly as possible.
- Pay off all debt with the snowball method. Pay off the items with the smallest balance first and then take that smaller payment and add it to the next biggest debt and so on.
- Fully Funded Emergency Fund – 3-6 months of living expenses.
- Invest at least 15% of pre-tax earnings for retirement.
- College funding for your kid(s).
- Pay off your mortgage early.
- Build wealth and give.
We’re actually going to be moving the baby steps around due to the economy. Instead of attacking my student loans next, we’re going to jump to BS3 and save up 3-6 months living expenses. At the same time, we’re going to start a new car fund since our almost 16 year old other car isn’t safe and probably won’t last much longer. We’d like to drive the thing into the ground so it won’t go anymore and we have more time to save. But at the same time, we’re planning to donate (tax deduction) it to Goodwill or some other charity and doubt that they’ll take it if it doesn’t run. So hopefully we’ll be prepared when a good deal comes along. Once this step is done (which should take the entirety of 2011) then we’ll go back and back off the student loans (consolidated and I think I still have like 15 years left to pay back).
(Word Press is doing something to my formatting. There are separate paragraphs here.)
Congratulations! I can’t wait till we get there. 🙂 We are working towards paying off our remaining 4 credit cards and 2 car loans. We paid off our first CC last month and it felt so good! We are following Dave Ramsey, too, and we had nothing we could feasibly sell, we didn’t have any extra in our income to pay towards debt, and Jason couldn’t pick up more hours, so the only other option was for me to go back to work. 100% of my income is going towards the Baby Steps. We’re on #2!
Nicely done.
i might be really stupid… but what is FX??