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Financial Basics Guide

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What is this guide?
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Who is this guide for?
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Where do I disagree with Ramsey? Where do some people disagree?

0) Learn How to Budget.

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How?
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Useful videos:

1) Build a starter emergency fund. This is $1000.

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Why?
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Useful Videos:

2) Use the Debt Snowball Method to pay off ALL DEBT

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How?
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Examples
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Useful Videos:

3) Save six months of expenses in an emergency fund.

Congrats on being debt-free! After this step, we can ease up on the intensity.

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Why six months?
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What should my budget look like in this step?
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When can I use my emergency fund?
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After a 6-month emergency fund, we still remain intense.

4a) Invest 5% of your income into retirement accounts

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Why?
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What order should I invest in retirement?
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What should my budget look like in this step?

4b) Save towards a downpayment

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How much do I need to save for a downpayment?
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What should I look for when buying a house?
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Can I buy things like cars, shoes, and dope things at this stage?
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Useful Videos:

5) Get a Mortgage

This is where the path REALLY deviates from Ramsey, and I’ll dive into specifics. First, I will define a few terms, explain why I believe his approach is unrealistic for most people living in California, and then highlight a more realistic balance.

Once you’ve secured the mortgage, shift back to 15% for retirement.

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Definitions for common mortgage terms
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How does interest impact a mortgage over 15 years?
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How much home can you afford using Dave’s rule?
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What is the advice I’d give to Californians?
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How much home would you get approved for under traditional guidelines?

Now that a mortgage is secured, we can go from intensity to intentionality. We are back to the plan. These next steps occur at the same time.

6) Invest 15% of your income into retirement accounts

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What order should I invest in retirement?
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What should my budget look like in this step?

7) Treat yourself.

8) Pay off the home early.

9) Give and share with others.

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If this was helpful, consider donating to the nonprofit I’m currently fundraising for!

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If you’d like to get coached on managing finances and budgets, you can sign up here.