I have always been fascinated with finances ever since I was a kid, but learned only a few things about how money and debt worked before I graduated high school and started college as a young adult. I remember signing up for student loans and not really thinking a lot about the end results of how much I was borrowing except to not borrow “too much” when everything is said and done. I ended up borrowing over 40 thousand dollars in federal student loans when I finished my undergraduate degree and I felt like that wasn’t that bad compared to others who borrowed a lot more than me but what I didn’t really consider was that large amount plus “the juice” aka interest that went along with each loan. Soon my debt had ballooned to over 50k and I was making bare minimum payments and a little extra here and there. Some things had to change so I started looking into how to better my situation with a proven plan that would work for me and that’s when I ran across Dave Ramsey and his baby steps on how to pay off debt as well as save and invest with a bright future in mind.
I believe I ran across Dave Ramsey through YouTube videos and then decided to invest in his book “The Total Money Makeover” and try to use it to empower myself to get this debt off my back. Dave’s baby steps are as follows: Step 1: Save $1,000 for your starter emergency fund. Step 2: Pay off all debt (except the house) using the debt snowball. Step 3: Save 3–6 months of expenses in a fully funded emergency fund. Step 4: Invest 15% of your household income in retirement. Step 5: Save for your children’s college fund. Step 6: Pay off your home early. Step 7: Build wealth and give. I didn’t exactly follow Dave’s plan all the way through because step 2 usually takes years and I bought a condo while trying to pay off my debt and that immediately lead to more random expenses that had to be taken care of on the spot. I regret nothing though because this situation lead me to work even harder to pay off debt and handle my affairs by getting a side hustle to go along with my full time job. After a little over 2 years of hustling I had payed off my car, made some upgrades to my condo, and amassed over 50 thousand dollars in savings by putting away most of my side job’s earnings along with tax return refunds.
I said all of that to say this, I still have a ways to go on the baby steps myself because I still have some student loan debt and a car note to pay off but I found a blueprint that works and it helped me get motivated to go above and beyond to better my financial situation. I encourage everyone who reads this to also look around their financial situation and get fed up with their debt and attack it with everything you have so that you can find yourselves in the best financial situation you’ve ever been in as well. Just to be clear this is not a Dave Ramsey sponsored peace of writing, but a wake up call to everyone who feels stuck and needs some a positive empowering voice to help them get into the right mindset to push forward no matter the obstacles.
