Why Dave Ramsey's 7 Baby Steps Work

Brought to you by the EveryDollar app. Start budgeting for free today. Yeah, so my wife and I, we've been listening to you guys for a while, following along, and we're into step four now. And we've, in doing so, we started actually repping youth sports was our side hustle. And we're curious, do you, when you get to step four and you're looking at saving the 15%, do you keep up with the side hustle and the overtime? And do you include all of that, that, that intensity when you, when you get into that 15%, because it, it, it kind of drastically changes the number that we're looking to save through that. Well, I mean, you can just, you can decide what your career path looks like. I would not sign up for an extra job as my life goal. In other words, extending it in perpetuity. So no, when we go to baby steps four, five, and six, you move from intense to intentional. Now, if intentional is I'm going to do some sports reffing, but not as much as I used to, because I want to put more into my 401k while I'm adjusting my main career so that I don't have to work extra ever. You know, but, but you can choose a side hustle just because, but I, I would not require it. And I would want you to dial back on it. It sounds like you've been putting in a lot of hours or if you, if you have this 15% to put down on your house and y'all have this fixed number, you don't want to run through that finish line. You just can't sprint forever is the thing. Right. So we're kind of in a weird spot. So I'm a, I'm a union sheet metal worker. And, and with our, with our, through our package, right. I put a 40 something 46,000 a year into the three pensions. Right. So if we're doing the math off of what, how you guys say you cut that in half, that's like 12% right there. Even cut in half. Okay. Uh, my, my yearly is 140 ish. Um, my wife is 55 and then we bring in anywhere between 20 and 30 through the reffing, uh, um, multiple sports. So I mean, do you want to stop reffing? Do you want to stop? I don't know about stopping the reffing. It's kind of, it's kind of fun. You get exercise and you get paid to do it. I kind of, I kind of thought, I kind of thought I heard that a little bit. Does she want you to stop a little bit? Uh, she wants me home a little bit more. Yeah. I think you, I think you dial it back. I think you dial it back from intense to intentional and you say, I'm going to throw some over here. So I've got a bigger nest egg that is non-union and the more, the larger that is, the more comfortable I get. Uh, the less I'm counting on the union pension, the more comfortable I am, less I'm counting on anybody's pension and more on my own nest egg, the more comfortable I am, not just union. And David, you know what I would love for you and your wife to do? Y'all just been through a big thing. Y'all worked your butts off to pay off your debts to get an emergency fund. What if you guys imagined we have a brand new marriage? Y'all go out for a half day and just say, Hey, what do we want our life to feel like? We are the drivers in our, uh, in the driver's seat of our own life. What do we want our marriage to feel like? And what do we want to feel like when I get home from an exhausting day of sheet metal working? What do you want to are like, you get them saying y'all get to create this thing and then reverse engineer it with, we got to go to work. You got your jobs a couple of days a week. I love reffing. I love it. And she's like a couple of days. I actually like you. That's why I married you. I want you around. And y'all can have that conversation. It's not like this life is happening to you now. Now y'all get to decide what this thing looks like and feels like. And there'll be seasons of sprints and seasons of walking, but I want y'all to stop for a second and pause and celebrate the crap out of yourselves and plan it moving forward. Absolutely. And Dave, uh, real quick, can you walk through just for someone who's new, the baby steps from the, like he called said, I'm baby step four. Now can you walk us through that? Sure. Maybe step $1,000. Yeah. Save a thousand dollars, a little starter, beginner emergency fund, just get a little distance between you and everything can go wrong. Murphy. And, uh, then once you've got that and you need to do that, like in the first month, you're on a budget, you're going to squeeze a thousand dollars, sell some stuff, have put some stuff on Craig's list, whatever, all that Facebook marketplace, whatever it is. Right. Then we're going to the important one that everyone knows us for is you're going to get out of debt, everything, but the house. And that's baby step to list your debts, smallest to largest attack them with a vengeance, working all the time, selling everything, not going to a restaurant, not going on vacation. We're getting out of debt and you clear your debts. And that's what they've done. They're debt free. That's a cool place to be. It's so cool. Yeah. And zero debt. And when you got zero debt, now you have control. Other than your home, you have control of your most powerful wealth building tool, which is your income. You're not giving it all to freaking Ford motor credit and to Citibank. What's in your wallet? My money. Yeah, that's it. So there we go. Right. So we're going to, we're going to be out of debt. Then we're going to build an emergency fund. Grandma's rainy day fund of three to six months of expenses, a proper one. And that's taking the thousand dollar account, adding to it. That's where they are. They've just completed that. They're there. They're their own bank. Now, to an extent, they have no payments and they have an emergency fund, a good one. So, so I mean, think what if you're out there and you're brand new and you got a bunch of payments, think what it would feel like, like no one's standing on your chest. If you had no payments and $20,000 in the bank. Yeah, that's a, that's a big deal. That's where he is. And now he's trying to, trying to exhale off the ref thing and can't figure it out because he's been so freaking intense to get there. And that's exactly the way it should be. He's been 160 miles an hour and he's trying to slow down to 50. But if you, that's a great analogy when you're driving one, one 10, right? You drive one 60, I'll drive one 10 and you go, you slow down to 70 because your app says there's a policeman down the road. It feels like you're walking. It feels like you're crawling down the highway. I went to turtle mode. Yeah. Yeah. You're still going 70. A wreck is still going to kill you. You're going fast, but not that fast. Yeah. It's different. So then you do baby, you're intense, like crazy intense in those first three. Then you move from intense to intentional, meaning we're going to do things on purpose, but we don't have to be so freaked out. Now we can save up and go on vacation. Now we can save up and move up in car a little bit in cash. Now we can buy that couch in cash or like his wife was talking about. Now you can just not have to work all the time. We can watch office reruns together at night, just us sitting on the couch. And where did that come from? I like, it's not even about purchasing. You get to decide what you want to do with your life now. Exactly. You decide. So, and baby steps four, five, and six, you do simultaneously. Four is 15% of your income going into retirement. Five is safe for kids college. Six is pay off the house. The average person work and seven is when your house is paid off and just become wealthy and outrageously generous and be generous along the way, but now be outrageously generous. And so the average person working this stuff, the book, total money makeover came out, um, in 2003, 20 million copies. Now that outlines those baby steps. Tens of millions of people have done this. Now the average person doing it is paying off their home at baby step six in about seven years from the time they start this going from intense to intentional. Now that's the average. Some take a little longer, some take a little less. Um, and then that sets you up to be able to invest even heavier than and the average person is becoming a millionaire, a net, you know, a net worth of $1 million or greater. Um, in about 14 years, that's what we're seeing. So, um, this is not an easy plan. It's just one that works every time, every time, every single time. That's how you do it folks. And so grandma's ways of handling money. My wife told a couple of friends of ours this at one point, and I loved what she said. They were, they were in their thirties and they were like, man, we should have been doctors. We should have gone back to med school. And I am always the eternal optimist. Like, why don't you just go? And one of them said, cause we'd be both be 42 when we graduate. And my wife said, that's not the right. You're not looking at this, right? Y'all are going to be 42. Anyway, the question I need to ask yourself is do you want to be doctors when you're 42 or not? The reason I bring that up here is you're going to be seven years from now in seven years. Do you want to not have a house payment? Cause that, that journey starts today. If that's what you want to do, you're going to be you in 15 years, your spouse, and you were going to be married in 15 years. Do y'all want to be millionaires or not? And that, that, that journey starts with step one today. Yeah. Right. And do we want to be on the same page? Same team, the most difficult subject in marriage, which is money. Yeah. Are we going to talk about it? Are we going to get on, get aligned on our values and enjoy each other in the process that these are the by-products of what occur on this journey? Yeah. Create your free every dollar budget today. The simplest way to budget for your life.