Building Blocks

Often times, the lines are blurred between being underwater in debt and living paycheck to paycheck. Both will prevent you from building generational wealth. What this section is aimed at, is providing knowledge and insight at conquering these 2 obstacles.

Dave Ramsey's Baby Steps

If you are underwater in debt and haven’t heard of Dave Ramsey, then chances are, you probably have been looking in the wrong places for financial advice. For the most part, we agree with Dave Ramsey and his stance with money management. We just have a few disagreements with him but if you are unable to build generational wealth in your current circumstance, then these steps could work for your situation.

Baby Step 1 - $1000 emergency fund

This is to protect yourself in cases of a rainy day. A car issue, etc.

Bonus tip: High yield savings accounts can boost your savings on a monthly basis. A couple percentage points more on a savings account will produce greater returns.

Baby Step 2 - Pay off debt. (Except Mortgage)

There are 2 different methods for this. The Snowball method (Dave Ramseys pick) or the Avalanche method.

Baby Step 3 - 3-6 Month Emergency Fund

If you added up all of your expenses for 3-6 months, how much would that be? Put that much into a savings account.

Baby Step 4 - Invest in Retirement

Dave suggests putting 15% of your income into your 401k.

Bonus tip: The more knowledgeable you become, the more you'll learn how to utilize the different investment/retirement vehicles.

Baby Step 5 - Invest in Kids College Fund

Set up you children's college fund so they don't have to view student loans as an option.

Bonus tip: Most states will offer a 529 account. This usually has various tax advantages that can help benefit you. Check with your accountant and/or state.

Baby Step 6 - Pay off Mortgage

After fulfilling the previous baby steps, you can start paying off your mortgage.

Baby Step 7 - Build Wealth and Give

One of the joys of being a Christian, is being able to bless those that are less fortunate.

The rich rules over the poor, and the borrower is slave of the lender. - Proverbs 22:7