One goal that my husband and I have is to become debt-free. One of the biggest things we want to accomplish is building our savings to cover our income for 3 months. I stumbled upon Dave Ramsey’s website by accident and found some interesting information about investing. If you are interested in starting a nestegg for your family, here are a few good tips from Dave to get you start! Click the title of this post if you’d like more tips about saving and investing.
Baby Steps: Don’t start investing prior to completing Baby Step 3.
$1,000 to start an emergency fund.
Pay off all debt using the debt snowball.
3-6 months of expenses in savings.
Invest 15% of household income into Roth IRAs and pre-tax retirement.
College funding for children.
Pay off home early.
Build wealth and give! Continue to invest in mutual funds and real estate.
Investing For Those Just Getting Started:
Be sure you have completed the first 3 Baby Steps.
Begin by doing pre-tax savings in (401k, 403b, TSP, Traditional IRA) and tax-free savings (Roth IRA, Roth 401k)
NOTE: If you receive a match in your (401k, 403b, TSP), invest here first up to the match. Then, fully fund a Roth IRA for you (and your spouse, if married). Then, come back to the (401k, 403b, TSP).
If you are still on Baby Steps 1-3, be patient; put off investing for now. Avoiding a crisis with a fully funded emergency fund and paying off high-interest debts is a fantastic investment!
Courtesy of Dave Ramsey
