As Boulder City’s ONLY Dave Ramsey endorsed Financial Advisor, I find it necessary to go back to the basics every once in a while. Let’s review his seven steps for becoming debt free and financially protected for the rest of your life. Building a new future with money is a lot like building a home. You don’t add the roof until you’ve finished framing, and you don’t frame until the foundation is secure. Know-how is 20 percent of the equation. Behavior change and self-discipline make up the other 80 percent.
$1,000 to Start an Emergency Fund. An emergency fund is for those unexpected events in life you can’t plan for, like plumbing issues and brakes that squeal.
Pay Off All Debt but the House. List all debts but the house in order. The smallest balance should be your number one priority using a debt snowball payment schedule.
Three to Six Months of Expenses in Savings. This step is all about building a full emergency fund. With three to six months of savings, you’ll never be in debt again – no matter what comes your way.
Invest 15 percent of Household Income Into Retirement. With no payments and a full emergency fund, put 15 percent toward retirement.
College Funding for Children. With college expenses continuing to rise, don’t let them sneak up on you. There are tax-advantaged savings vehicles that let you save for your kid’s education expenses.
Pay Off Home Early. Just imagine life with no mortgage. Not only are you paying off your home early, but you'll also be saving tens of thousands of dollars in interest fees.
Build Wealth and Give. The last step and by far the most fun. It’s time to live and give like no one else! Build wealth, become insanely generous and leave an inheritance for future generations.
Taking control of your money is easier than you think, and it’s worth it.
To learn more about this and other Money Matters articles, contact Fritz at (702) 293.0880 or McDonaldFinancial.org.