My Favourite Personal Finance Advice from Dave Ramsey
If you’ve had the chance to read my article on “15 books to read in 2022”, you surely already know that Personal Finance is one of the areas I have been educating myself the most since 2021.
My mind loves structure, plans and milestones. So, for almost everything I try to accomplish, I have a deep need of seeking guidance and breaking the plan into steps.
Amongst, the professionals that have the most influence in how I manage my personal finances is a gentleman called Dave Ramsey.
Born in 1960, he is known as one of the most iconic personal finance thought leaders in the United States of America. At a very young age, he started a very successful career in real estate and it is often the case, due to a weak personal finance foundation, Dave made various poor choices, and he ended up filing for bankruptcy just a few years after.
As he went through years of financial recovery himself, he started providing advice at his local church.
Dave realized that his advice really worked. Families were getting out of debt and building wealth with the principles he shared. That is when iIn 1988 he founded a company, today known as Ramsey Solutions, which provides multiple financial consulting services, content and he also published multiple best-selling books.
Taking control of our own finances is simple but not necessarily easy — at least not for most of us.
There are just so many things we can do, varying from paying debts, cutting our expenses, investing, creating different income streams to starting an emergency fund and investing into a retirement plan.
If not structured and broken down into actionable steps, this process can be so overwhelming — and that is where Dave’s advice really helped me define my approach.
He is known for the Baby Steps — a framework for paying off debt, saving money, and building wealth. A plan I have personally adapted into my own life and consider the most valuable piece of advice he ever shared.
7 Baby Steps:
Baby Step 1: Save $1,000 for Your Starter Emergency Fund (to be surely adjusted into an amount that makes more sense for your demography and the relevant currency)
Baby Step 2: Pay Off All Debt using the Debt Snowball method
Baby Step 3: Save 3–6 Months of Expenses in a Fully Funded Emergency Fund
Baby Step 4: Invest 15% of Your Household Income in Retirement
Baby Step 5: Save for Your Children’s College Fund
Baby Step 6: Pay Off Your Home Early
Baby Step 7: Build Wealth and Give
