Progress Report

I’m working within a loose interpretation of Dave Ramsey’s Baby Steps, outlined below.

My biggest departure from his advice is that I will invert steps 2 and 3 of his baby steps. Life experience has made me unwilling to forego a financial safety net even if this means delaying total elimination of my debt.

  1. Save $1,000 to start an emergency fund
  2. Pay off all debt using the debt snowball method
  3. Save 3 to 6 months of expenses for emergencies
  4. Invest 15% of your household income into Roth IRAs and pre-tax retirement funds
  5. Save for your children’s college fund
  6. Pay off your home early
  7. Build wealth and give

1. $1K Emergency Fund

I completed this step several years ago and I’ve never looked back.

2. 3-6 Months’ Expenses

I have roughly 9 months of living expenses saved and invested in something relatively high risk for an emergency fund. I also have 50% buffer on top of Ramsey’s recommended 6 month’s of expenses, so I feel reasonably secure. I don’t plan to add to this invested amount, but I also will not liquidate it to reduce my debt.

3. Debt Snowball

This is the step I’m currently working on. My modified Debt Snowball method entails paying down high-interest balances first, with the exception of small balances that would immediately improve my cash flow.

I created another post with more specific discussion of my debt elimination goals. I will capture my progress below.

Debt Rate 9/1 9/15 10/1 10/15 11/1 11/15 12/1
Group C Loan 7.0% $3,156           $0
Group B Loan 6.3% 10,074           ?
Group D Loan 6.0% 10,895            
Group A Loan 5.3% 22,495            
Logix FCU 4.0% 11,925           ?
Barclaycard 0.0% 1,330           $0
Total - $59,875 <$54K <$52K <$50K <$48K <$46K <$44K
Weighted Avg Rate - 5.3%