Anyone here following Dave Ramsey's 'The Seven Baby Steps'?

30% to mortgage
15% to IRA
15% to college fund
30% to IRS
...................
10% to pay rising gas price

should I use $1000 emergency fund to buy grocery?

groceries are more important than IRA/College:-)
Great program helped me a lot.

Yes.. noticed you skip step 04.

Yes, I followed them, and then moved on towards becoming debt free. Except for a home mortgage with a few years to go, we're there...

It is a good plan. We work on a cash and check basis. Cash works best, because when its gone, ITS GONE!!! Banks and credit card companies do nothing to help consumers, but make them swim in a pool of debt!

My wife and I (married 5 years this month) went through the program three years ago, and paid our house off last summer. We didn't have any other debt but it helped us discuss the monthly "budget" and reduce differences.

The biggest thing for us is deciding what is necessary or not. We now have two kids and being out of debt is definitely much easier.

It took us 6 months or so and several budgets to find one that worked for us. Don't give up, it is worth it.

Daniel

And we've reached the goal! We paid off the house mortgage last month. Now debt free!!

Mortgage burning party! Congrats!

If you have self discipline, good job that you are reasonably sure wont disappear, an understanding of math, then debt is the best tool you have to accumulate wealth by using reasonable leverage. You must have a cash reserve of 6-12 months living expenses in the bank. The biggest mortgage you can afford for the house that meets your needs frees up lots of cash for LONG TERM investment.

Paying off a mortgage and living on cash is not the best way to accumulate wealth.

The number one rated financial planer by Barons magazine for the last two years Ric Edelman, is a far better source of financial planing that Dave Ramsey. www.ricedelman.com

I agree if you don't have some debt then your credit score will be low as they have no way to gauge how you pay bills. I seen this with my dad and my mother-in-law years ago. Also paying a finanical manager in some cases can cost more than it is worth.

Daniel,

Yea, the end of the program is the pay off. All the money we are aggressively dumping towards paying down our debts will be ours at the end of the process. At that time, perhaps three years from now, our expenses will be bare bones, we won't have any debt, and we'll have thousands rolling in just to build wealth due to the spread between our expenses and our take home pay. Credit scores are good for going into debt, and debt no longer is in our plans. We won't need to leverage borrowed money because we will have enough of our own from income, replenished each and every month through our pay checks, to leverage through the additional discipline we're developing through the Baby Steps.

Vince

There is a lot of incorrect information floating around about credit scores. I used to get a zero percent credit card and keep all of my debt on it. Every 10 - 12 months the introductory offer would expire and I'd transfer the debt to a new card with the same zero percent rate and cancel the old card. I did this for years. People told me it would ruin my credit rating.

I finally paid off all of the debt and the only remaining debt I had was my mortgage. Again, people told me that was "bad" for my credit score.

My wife wanted a new car and when I told the dealer I wanted to pay it off in 3 years I was offered zero percent financing and a $1500 discount "if" my credit panned out.

When they ran my credit score through 2 major reporting agencies, BOTH of them came back with a FICO score of 848.

Question: If my credit practices were so "bad" why did I have a credit score only 2 points below the perfect FICO score of 850?

There's entirely too much fallacious "information" out there regarding how credit scores are calculated.

I was in debt (deep debt) for years. I finally got my act (and the wife's) together and got them paid off. Down to about 4 1/2yrs on the mortgage. Time to up the 401K contribution and quit buying "stuff".

Quote from Forrest Gump: "there's only so much fortune a man really needs and the rest is just for showing off".

Nice! I hope to join you one day.