💰

Dave Ramsey x Khizer Baby Steps

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

0) Learn How to Budget.

‣
How?
‣
Useful videos:

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

‣
Why?
‣
Useful Videos:

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

‣
How?
‣
Examples
‣
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.

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

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

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

4b) Save towards a downpayment

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

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

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

7) Invest in wild stonks/treat yourself

8) Pay off the home early.

9) Give and share with others.