The "expanded" baby steps

Ok we know Dave Ramsey has a financial plan following 7 basic steps.
However there are a few things "left out" if you have not attended Financial Peace University.


So here are the "expanded" baby steps.

0.1: Commit to NEVER borrow $$$ EVER for ANYTHING other than possibly a house.

0.2: Talk with spouse and get him/her on the same page as you concerning finances.

0.3 Do a written budget

0.4 Temporarily stop all retirement contributions

0.5 Get current on all bills (You MUST have Shelter, Food, Utilities, Basic clothing)

0.6 Get Health insurance NOW (chances of getting sick w/ major medical bills are larger than that of death), especially if you have children.

0.7 Get Term Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died. Especially important if you have children !! Social Insecurity provides only a small amount of coverage if you have dependents.

0.8 Amputate "toys" (bikes, boats, ATV's etc) if they will keep you from completing the snowball within 12 months

0.9 Cut lifestyle (Cut CATV, Cellphone, Regular phone "extra's", Internet, Eating out, etc) and/or take second job if $1000 Emergency Fund will take more than 30-90 days. (depending on income)

1.0 Save $1000 In baby EF

1.1 Chop up Credit Card's (You have an EF now, no NEED to keep those CC's !!)

1.2 Amputate cars that you can't pay off within 24 months (You have an EF to fix the "bondo buggy" if something should happen)

1.3 Consider raising insurance deductibles to $500 or $1000 and dropping full coverage on paid for "bondo buggy" (You have an Emergency Fund ya know)

2.0 Do debt snowball (No you are not STUCK-this step takes time) Keep yourself and your spouse motivated. Get MAD about DEBT!!

2.1 Start car replacement fund (do not PURCHASE car until step 3 is done or old car dies)

3.0 Save 3-6 months EXPENSES in Emergency Fund

3.1 Start furniture or other non-essential stuff replacement fund

3.2 Move up in car if you still feel the need to (must pay cash for it)

4.0 Contribute 15% to retirement

4.1: Take your first vacation since finding Dave if you can pay cash for it (no using the EF !!!)

4.2 Save up 20% for home purchase OR pay down existing mortgage to the point you can drop PMI.

5.0 Save for kids college fund

6.0 Pay off house

7.0 Live like no one else since you have lived like no one else :)

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